A London holiday surely is far from being described as cheap by any measure. The daily rates of hotels especially with the approaching London Olympics are skyrocketing. You will also be lucky if you can get a booking for the dates of the games. The travel money too is hard to stretch if you have to eat out every time. There are alternative London accommodations though if you really want to witness the 2012 Olympics:
Bed & Breakfast Club
You will find The Bed & Breakfast Club houses in the more pleasant neighborhoods of London offering rooms of private residences offered for rent. Since you will be occupying a private room, do not expect luxury hotel like conveniences and pampering. It will have the basics though like entertainment system, phone, and twenty four hour check-in. Add to the simple elements the personal touch of the service.