@Windchime - As a keen traveller I can give you a few tips. I've never been to London for a vacation, only for work, but my company paid for a serviced apartment. This can work out cheaper than London hotels if you are staying for around a week or more.
When I travelled elsewhere in Europe I looked around the net for information on university dorms. If you time it right you could get a basic room for less than a hotel.
One other possible idea is couchsurfing. You need to be a member, but it's free to join. Local people host you for no cost, often providing their services as a guide or advisor on things to do.