I just came back from a London trip a week ago.
We stayed at the "Arriva Hotel", King's Cross. http://www.super-london-discount-hotels.com/discounts/london/arriva-hotel
It was really small but not bad. Very clean and 5 minutes walk to King's Cross station and the Tube. From there you can get everywhere in London.
I've already stayed in worse hotels in London. I think the Arriva was absolutely ok.
And it's really close to Tottenham Court Road if you're planning to see We Will Rock You.
"This world may be another planet's hell."
- Aldous Huxley