Rent by the room

why wouldn't one do this?
Most landlords don't want that level of involvement. Licencees will move on a lot more frequently meaning you're left with empty rooms for a time, plus you could be called upon to referee disputes and more transient people are less likely to look on such an arrangement as a home and so damage might be higer.
 
That makes sense.

In the current market though is there not scope for bigger deposits and low likelyhood of vacancy rates
 
If you buy an apt as a holiday home can you let out a room even though you might only use the property yourself once a month for a night or two? Would be quite nice for a tenant as they would have the place to themselves for the majority of the time.
 
Or you could move a family member in for 2 years which also resets the rent cap
 
Then each "unit" would have to meet minimum requirements, eg they would have to have their own bathroom as bedsits are no longer permitted