Officers raided the detached property last morning just hours after the unidentified victim was hacked to death with meat cleavers.
The two men were shot by armed police officers and are under arrest as they are treated in separate London hospitals. One of the suspects was named on Internet forums and Twitter as Michael Adebolajo.
Little is known about his accomplice. Police said an extra 1,200 officers were deployed on the streets of London as Cameron revealed that authorities were looking into what what the security services knew about the killers and whether the attack could have been prevented.
Government sources confirmed that the names of both suspects were on a list maintained by the security services, but stressed it was unclear what level of surveillance they were under.
Adebolajo, and his accomplice are believed to have run down Lee as he walked back to the Woolwich Barracks on Wednesday, crushing his body against a road sign.
The suspects then hacked and chopped at his body like ‘crazed animals’ before dragging his corpse into the middle of the road. As they tried to decapitate him they were chanting ‘Allah Akbar!’ and yelling ‘this is what God would have wanted’.