Last time I was in Lalibela, December 2012, I accepted the invitation from a local Deacon called Arega to be accomodated in his house. He has built 4 service rooms in his compound, totally 3 twin bedrooms and 1 single bedroom. The rooms are quite basic but clean, with some nice Lalibela-painting-style decorations on the white walls and emroidered bedding. Each room has a small toilet which actually need further maintenance (especially the boilers who were not functioning at that time).
This is because Arega, a devoted, gentle and generous guy, just started this family business and needs more clients to improve his services, among which there is also his horse who can be rented for a ride or an excursion to nearby churches.
The house is not far from the churches, and it is located near the asphalt road that goes down from the upper town towards the airport or to Gashena.
If you look for a very cheap, family-run accomodation and for a pleasant time fully immersed in the real life of the inhabitants of Lalibela, then you should profit of the presence of Arega. His contact is 0921525636 or email@example.com