It's not ideal but you can share a house with a bunch of people through rent-sharing websites for £200-400 depending on the zone. I personally used that for a short stay while searching for something decent closer to zone 1 to share with my friends, and saved some money at the same time. It definitely wasn't as awful as I was expecting.
In some ways, this type of solution assumes one to be a young person, without obligations like e.g. a newborn to take care of, or types of mental illness that might make it untenable to like in a dorm-like environment further into adulthood.
For people who can sustain this situation, it does offer ways to have a higher quality of life even on a low salary. But a lot of people have families to raise and personal situations to manage that are fundamentally incompatible with it, requiring them to afford other living arrangements, creating a bigger stress factor upon on their budget.