It would once have been called a pied a terre, but still small even for that. As pps have said, there is a market for this sort of thing, and the area is hideously expensive.
Someone said ‘bedsit’ which were once common, but you invariably shared a bathroom, while having your own basic cooking facilities. And they were usually grotty, no central heating, you put coins in a slot for a gas fire. Dh lived in one when we first met as students - his cost 32/6d a week - £1.62. 😱.
But this was back in the Very Dark Ages and Up North, London would have cost considerably more.