Guesthouse Vellir is a hostel that I only ventured into the hallway where my room was. I’m not sure how many rooms, but in my hallway, there were 11 with 2 bathrooms. The room I was in was ok, but definitely not great. The bed was not very comfortable, though better than some I have slept in. The area is fairly quiet, but a bit far from the road.
The woman running the hostel is quite nice and very welcoming.