This is the best "budget" option by far. Very helpfull, friendly staff, great kitchen to use, quiet and clean rooms, nice garden area and walking distance to downtown/shops/Museums
Coffee and tea is free and for 5 Euro there is a buffet style breakfast, which is great.
Furniture is a bit "vintage", but everything is very clean, comfortable and practical.
My go-to-guesthouse whenever I go to Reykjavic.