The Visit London link is the slightly more official one, but feel free to check out the others as well:
London’s Official Tourist Site:
http://www.visitlondon.com/accommodation/
Hostels in SE1:
http://www.dovercastlehostel.com/
http://www.st-christophers.co.uk/london-hostels/london/london-bridge
More Hostels and General Useful Links:
http://www.londonnet.co.uk/ln/guide/accomm/budget.html
http://www.accommodationlondon.net/
Remember: the further afield you go, the cheaper, but don’t forget to factor in travel costs. The festival is based in SE1, so going South or East is probably your best bet in terms of travel links and cost efficiency. Use www.maps.google.co.uk to check out how far it will be, and www.tfl.gov.uk to see how long it will take you to get there. Some Underground lines are inevitably out of action on Saturdays and Sundays, so look up bus routes as well, which are far less likely to be disrupted.