
London is a great city, but it is an expensive city. Hotel prices in London are at an extreme level. This is especially true if you look in the central parts of the city - which is where everyone wants to stay of course. Who wouldn't want to stay close to all the action and near all the sights?
If you want to stay as close as possible to the center but still not pay extortion prices, you're out of luck. But there are two areas where it's possible to find at least slightly less expensive prices - King's Cross & Bayswater. However, it comes at the cost of quality. You won't find luxury hotels for a decent price. But you will at least find low-end decent "room for the night"-type of hotels in these areas.
Make sure to look up reviews if you find something that looks good in these areas. I found a lot of hotels that looked good in the pictures with prices I could live with. But then I read some reviews which painted a different picture. It took some time but there are gems to find there. As long as you don't expect more than just a room. These hotels are often not renovated in the last 10+ years. For me personally, the most important thing about a hotel is the cleanliness. If a room feels old it doesn't matter so much, as long as it's clean.
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Near King's Cross
King's Cross
King's Cross is located in the Northern part of central London. It's close to the British Museum and Russell Square. It takes approximately 45 minutes to walk to Piccadilly Circus from there, however, you still feel that you are in the center of London all the time so you don't notice the distance and you will find many interesting things along the way. And if you get tired of walking, King's Cross is the center point of the public transportation network of London.
I recently stayed in the Wardonia Hotel, just a few minutes walk South of King's Cross. It is only two stars, but it served its purpose and felt clean enough. Argyle Street, where Wardonia is located, is full of hotels of all levels, from one-star hostels to five-star hotels.
Another advantage of staying in this area for fans of Harry Potter is that King's Cross Station is where you find Platform 9¾. If you're not staying in the area there's no other reason to go as far as the station.

Typical street in Bayswater
Bayswater
West of the city center you have the vast Hyde Park. The areas North of Hyde Park contain a lot of hotels. Especially the ones around Bayswater Underground Station are often on the cheaper end of the scale.
This area is within walking distance of Oxford Street. It takes about an hour to walk to Piccadilly Circus, Trafalgar Square and many more sights of London, most of the distance which will be through Hyde Park. Two underground stations are serving the area from different lines, giving easy access to anywhere in the city. Bayswater Station and Queensbridge Station. Lancaster Gate and Notting Hill Gate are also nearby, as well as the large Paddington Train Station.
Many years ago I stayed at the Central Park Hotel in this area. We are talking more than ten years ago. From the looks of it, nothing has changed at that hotel. It looks pretty much the same as when I stayed there. It is a decent budget option if you just want a room and a bed.
There are many hotels near Paddington Station too, but they are often a little bit more high-end.
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