What?! Meg honey, seriously have a chat with your dh and see if he'd rather holiday somewhere else. You could go somewhere where it's cheaper to stay, London isn't cheap to holiday in.

As for the SIL, I think it's completely reasonable to tell her that it's not an option for you guys to pay for your own accommodation for a month, especially when you didn't budget for it, and you'll just have to catch up with her another time. She has no right to sook about that, that's just really thoughtless of her. Big hugs, what a pain. Definitely see if your dh wants to do something else.