I work at a London hospital and many of the registrars and fellows live in places not dissimilar, they have no real choice as they need to be based near the hospital when they're on call. It's disgusting really and to make it worse, I couldn't even afford that! This is why single people are either living with their parents much later or living in student style shared houses.
If you earn a moderate salary it's impossible to live well in London, you have to either earn a very high wage of little enough to receive benefit top-ups like tax credits.