Loved our stay at guesthouse Bjarney. Awesome hosts, super nice. Out of all the hotels we stayed in (4 total), this was our favorite in Iceland. Super clean, free parking, spacious room, great hosts.
Please do note that the hosts live in the guesthouse as well, we thought that would be awkward at first but it wasn't. The hosts are super nice, they let us use their jacuzi and sauna. Would recommend!