I've recommended this before here and will continue to do so:
On my family trip earlier this year we booked two rooms in the Dolphin Square hotel. It's a little out of the way, south of Victoria, but was one tube stop from Victoria station and in a nice neighborhood. I booked through priceline (see biddingfortravel.com for strategy to ensure you get Dolphin Square) for about $90/room/night (the regular rate is about 150 pounds/night). They combined the two rooms into a two bedroom suite with a kitchen and it worked out great. We esentially had the best of both worlds. Maid service, etc. of staying in a hotel and the space and kitchen of a flat.
I highly recommend this (and no, I don't work for Dolphon Square, Bidding for travel or Priceline
).