Really great with some downsides.
We used to book family rooms. These days you can often find ones with a double bed which is nice. My favourite was Ambleside - what a location. Another great one is Edale.
Stow on the Wold was a fantastic location but did have a smelly carpet in the room.
The big hostels have usually put a cafe on the old communal rooms so that the self catering kitchens can be very small. But still a great and inexpensive option for family breaks.