Are there copyright issues to consider? In the UK, any venue where live music is performed has to have a licence from the Performing Rights Society, which is the organisation which manages composers' copyright. Unless you can guarantee that absolutely no copyright material will be performed (and folk music is not necessarily non-copyright) you need a PRS licence, for which a fee is of course payable.

In England and Wales (but not, I believe, in Scotland) you would also need a licence issued by the Local Authority.

I suspect these are some of the reasons why there is no tradition of the House Party over here. Folk clubs almost invariably take place in pubs, which will usually already have the necessary licences. It surely can't be to do with the availability of beer.