Thanks everyone, there has been some good points made.

I guess my main "gripe" is that there is a room sitting there maybe 3 nights each week that's not being used. We have moved our wardrobe (no built-ins in this house) into Ds1's room, so we can fit DD's cot in our room. Ds2 already "shares" his room with the FDC children (they use the room during the day for their sleep room - so he has a cot permanently set up as well as sleep mats during the week).

I think we need to sit down and have a talk with him and see what we can do. I'm really thinking our best option may be converting the loungeroom, I really don't want to push Ds1 out. Ds1 is a good kid, and we have always had a very open relationship, even he will say "you're not kicking me out, just giving me a little nudge". (this is when he mentioned getting stuff together to move out of home and I gave him some towels I had put away for christmas pressies last year but didn't use)