Who are we to lecture them on the money side of this issue.
The facts given state that they were promised the house, and therefore did not think they would need to save for another property. They have spent money improving the house and making it their home... how do any of you know how much they earn or what there circumstances are?
We all have personal opinions on this, and I have ine...but this thread asked for some legal advice, not for everyone to get on their soap boxes and tell them what they should have done.
This issue revolves around their entitlement to a beneficial interest in the house, via an implied or express agreement.
Your daughter and son in law need to get some legal advice from a reputable property dispute lawyer.
J