This is the SPOUSE visa, not the settlement. The spouse visa is 2 years with no recourse to public funds.

Please ask this 'immigration agent' - you aren't IMMIGRATING to the US! Ask him/her why so high!!!??? We paid $200 for the facilitation. And no where have I read that "BIG FAT NO" is immediately done, when all we've heard (and from the UK Consulate in LA) that if something is missing or has questions, they ask for the documents and of course can ask for a face to face interview. Give only what they ask, of course to begin with.

A few thoughts after going through the process, and discussing with my UK husband.
1. your husband is going to live with his friend. Fine. But you cannot be on 'husband's council tax' nor on utilities. He needs a residence in his name - he needs to show he has put you fully into residence in the UK.
2. You don't need a spouse visa to GET to the UK. You can go for 90 days and exit, and do all this until the timing is better for the visa. Its an idea.
3. Your husband is illegal. No bones about it. It seems to me, a separate issue, and he needs to get out with full faith, and remember, this will probably mean he cannot regain entry to USA and will have a very tiny chance of ever getting a spousal visa through you to the USA, let alone permanent residency to the USA in the future. But that shouldn't be a problem as you both are wanting to settle in the UK.

The UK Embassy can't use his illegal status (IMHO) as a reason to say no to a British Citizen wanting his wife with him in the UK.

Again, email the consulate in Houston and ask for a list of VISA AGENTS. These are facilitators, not lawyers and sounds like you got a person who hasn't really understood you are a US citizen married to a British citizen applying for a spousal visa. It is not the ILR and also it is not about his illegal status to the USG.

I've never paid anyone more than $200 for a visa facilitation, and the high one was for the spousal.

Of course you can do it by yourself. Loads of folks do it!!!