Fifteen fire engines and around 100 firefighters are tackling the blaze in Ballards Road, which broke out at 2.15pm.
It is one of number of fires which have broken out across the capital on the hottest day on record, as the London Fire Brigade declared a major incident.
Hundreds of other brave firefighters are also tackling nearby blazes in Wennington and Upminster.
Fire crews initially attended a large grass fire off Ballards Road, which quickly spread to other buildings.
Borough Commander Paul McClenaghan, who is at the scene, said: “As firefighters were tackling that blaze, the fire was creating additional hotspots of fire which is now affecting sheds and further nearby properties.
“Our firefighters are working in incredibly hot, difficult conditions.
“There are cylinders involved in the fire which is adding to the challenge for crews.”
The brigade evacuated a number of houses from either side of the road.
A man and a woman were taken to hospital suffering smoke inhalation by the London Ambulance Service.
“The fire is creating lots of thick smoke and we would advise local residents to close doors and windows,” Mr McClenaghan said.
“There are number of local road closures in place so motorists are asked to please avoid the area where possible.”
Fire crews had to be scrambled from all across London, including Whitechapel, Leytonstone, Millwall and Clapham.
The cause of the fire is not known at this stage.