London: The Biography by Peter Ackroyd. One of the best books about dear old Londinium ever. It's not chronological - it's based on themes such as sewage, food, childhood and poverty and is immensely readable.
The London A-Z. Invaluable if you're a London or visitor - I never leave the house without one. You can find out a bit about the history of the company behind it at a-z maps. Artist Phyllis Pearsal (1906-1996) worked 18 hours a day walking the streets, designing and producing the first map. She also formed her own company to produce it - you'll find a detailed article about her at Design Museum.
Another comic everyman story set in Brickfield Terrace, Holloway abode of Charles Pooter, Diary of a Nobody. Charles even has his own Myspace profile. Author George Grossmith.
The Drowned World by J G Ballard introduces us a London of lagoons, where iguanas inhabit the empty boardrooms. Not a man-made global warming, this heat is caused by something much more plausible - the sun and the earth's proximity to it.
Robert Rankin has written more than a few books (with his own inimitable sense of humour) based in London and its environs in the comedy/fantasy genre - these include classics such as The Brentford Triangle and The Witches of Chiswick
Neverwhere by Neil Gaiman. One of the best fantasy books I've read in years. This features a whole other world under the London earth with characters such as the Angel Islington and the Blackfriars, never mind an Earl's Court travelling around in a tube train.