London is genuinely expensive. A hostel dorm costs £25-45, a meal at a decent pub £14-20, and an Oyster card trip £2.80-5 depending on zones. The saving grace: most major museums are free, and London's parks (Hyde Park, Regent's Park, Greenwich Park) are extraordinary and cost nothing. Budget travelers need £75-100/day minimum.
Mid-range travelers (£140-200/day) can stay in comfortable hotels and eat well. The weekly Travelcard for zones 1-2 (£40.70) is essential for frequent travelers. National Express coaches are dramatically cheaper than trains for intercity travel. Street markets (Portobello Road on Saturdays, Broadway Market on Saturdays) are free to browse and offer affordable food.