Lambeth Council said the wire was fed into the terraced house in Rectory Gardens, Clapham which had been illegally turned into flats.
It said the man acting as landlord was charging £100 per week for each of the eight rooms which shared one bathroom.
The council has repossessed the house.
The Clapham house had been licensed to a housing association on a "short-life" basis in the 1970s when the council was unable to pay for renovations.
But the agreement had continued for decades and it was unclear who should have been managing it.
Councillor Matthew Bennett, cabinet member for housing, said: "The conditions the people in this illegal HMO (House in Multiple Occupation) were living in were truly appalling, and represented a genuine danger to life and limb.
"It is shocking that someone can make money exploiting people by illegally renting out such dangerous accommodation with no regard for the safety of the people living there."
The council was alerted to the property as part of a programme to reclaim more than 40 buildings which remain operating under the short-life scheme and offer tenants homes with little or no rent.
Any resident displaced because of the action is being put at the top of the local authority's housing list for new accommodation in the borough.
The council said it had made about £58m through the sale of about 1,160 short-life properties.
It is considering whether to take legal action against the landlord.
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