Homestays and a driver in Sri Lanka - will accommodation be a problem?

The driver will usually take care of his own accommodation and meals. If it means that he'll sleep inside the vehicle, he will do that.

It's always better to contact the owners of the house you are renting to see if there's by any chance a place for a driver to sleep. If not, let the driver know in advance so he will be prepared. Make sure he gets some sleep. A drowsy driver is a risk you shouldn't take.

You are not expected to pay for the driver for meals either. However, when I travel with my family, we usually pay the driver for several meals.

Just remember to let him know that he can go and have his meals while you guys are having yours.

Most decent hotels would provide meals and accommodation for the driver. Even if they don't, drivers can easily find places nearby that provide cheap accommodation. While you are not required to, it would be a gesture to pay for that and their dinner, which would both cost less than $10 in most cases. In the daytime, I would usually have meals together, however if that is not your idea, I would again suggest paying for them, meals are very cheap here. Agree on this with the driver beforehand to make things smooth, but this really wouldn't be an issue as the hotel provides this.

PS: Remember, you don't need to do this. It's just a gesture. I am from Sri Lanka and we do the same when we travel.