Just to push back a bit, if one is a digital nomad and making a decent amount of money (or actively aiming to get to that level) why not live in London if one enjoys it?
One of the key moments in my DN journey was traveling through Germany and realizing that although my business supported me comfortably in Brazil (cost of living $1500/mo for two people), I was going to have to step it up in order to spend time in more expensive countries. And I did step it up, and more than tripled my income. Result: husband and I were able to spend six months in London without breaking the bank.
I definitely would NOT recommend London as a first destination when you’re still getting your work off the ground, but part of the perk of being a location independent entrepreneur is being able to live anywhere, not only in cheap places.
OK, back to original post! I lived in Elephant & Castle, you can find cheap and it’s quite close to the center, though not the “prettiest” neighborhood. Everyone talks about Shoreditch as an alternative/creative area; prices there might be rising though. At under £1,000 you might have to share a flat but ideally try to share with only 1-2 other people (I lived in a house of 6, it was too much).
Check out this thread for the coworking spaces. Even if you don’t live right near them, you can try to find a place on the same tube line so that it’s a quick ride.
Another tip - some tube stations are on the border between zones, so if you can find a neighborhood that’s borderline Zone 2/Zone 3, you might benefit from lower rent prices yet still only have to pay the Zone 1-2 fare for the tube to get into central London.
Alternatively - you’ll save money if you manage to get a place that enables you to take buses to where you want to go (bus is quite a bit cheaper than the tube).
Look for places to live on Gumtree.com and Spareroom.co.uk and it’s best to text, I got way more responses when I texted the landlord than when sending e-mails.