Perhaps this is a feature not a bug.

High rents encourages startups to be founded by those who haven't coupled up and who choose to live together.

A company of 3 single founders in their mid twenties that rent a two bed flat and then live and breath nothing but their startup collapsing on the couch each night can make two $50k angel cheques go a long way.

Edit: SEIS allows a friends and family seed round if up to £250k in London that the government will rebate 78% of in taxes (50% immediately and 28% if the company eventually goes bust).