It looks a bit 'for students, by students'. It's notable that nearly all of the film they offer is showing as sold out - unless they're planning to stop doing film, having virtually none to sell looks like a fairly large dent in revenue. The basic processing looks pretty cheap, but it's not clear whether it includes having the negs posted back. The page says the price includes a CD, which implies return postage, but also talks about the cost to return the negs is listed as "negative return", which I can't find anywhere.
As for running from a flat, I once knew a guy who lived with his girlfriend because he had turned his 2-bed flat into a small factory (he gave a me tour, and it was amazing). If they aren't doing that, then I suspect running a lab in a living space is going to be a compromise, especially if running water is needed for washing films. That means either the kitchen or bathroom, or some additional plumbing and drainage routed into a spare room. They could be subbing out the processing, but where would be cheaper than Crofton are charging, especially if £3.99 includes scan to CD and return postage? On top of that, scanning on a V850 sounds like a lot of time is being spent on earning £3.99 less costs.
Having said all that, it's tempting to run a roll of Vista through a camera and give them a try...
ETA: Return postage isn't included in the £3.99. I just went through the motions of checking out, and it lists shipping options in there starting from £2.80 (for "negative return") to £4.99 (Royal Mail 24 hours). So, in reality, from just under 7 quid for a single roll, and getting decently cheap for more rolls.
