Question for all mummy's and daddy's out there......

Do you allow toys in the lounge room?

When I had my DS I had a toy box in the lounge room, that is where he mainly played.
After having my DD I still allowed this as long as it wasn't to much of a mess.

Now DS is 4 and DD is 2. We have recently moved into a house with quite a small lounge room, already looks like to much is in here without the added toys.
I am thinking of enforcing the 'No toys in the lounge room' rule.
Does anyone have this rule and does it work, by work I mean, do your children use their rooms to play, or do they just hang in the lounge room and not play at all?

Honestly, I love that my kids can make play and have fun but the toys in the lounge room is starting to become a bit much, I think what makes it worse is that when I ask them to clean it up, it turns into a fight with the both of them.

So is no toys in the lounge room a good idea, help my sanity and stop the arguments? Or I am overreacting and should let child's play be??