As far as I am aware, you will, in addition to the cost of making circular holes and avoiding the ceiling / 1st floor joists, need to install Fire Resisting Hoods above each downlighter - sealed to the ceiling with Fire Seal Paste - in order to preserve the 30 Minutes Fire Resistance required between the downstairs accommodation and the sleeping accommodation.
You should also ensure that any transformers in the floor cavity are not surrounded by insulation leading to temperature build up and risk of fire. They should be the type that automatically shuts down when the get too hot.
Surface mounted spots with integral transformers may be safer and there are a lot of interesting types around at the moment which can add variety to a room and its lighting.
ONQ.
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All advice on AAM is remote from the situation and cannot be relied upon as a defence or support - in and of itself - should legal action be taken.
Competent legal and building professionals should be asked to advise in Real Life with rights to inspect and issue reports on the matter at hand.