You know what's cooler than London? London during a bunch of different time periods, and then a whole bunch of other countries to spice up our reading experience.
White Teeth is full of flashbacks to India, Jamaica, continental Europe, and old-timey London, but the present-day action takes place in London between 1974 and 1992. To be more specific, White Teeth is set in the North London neighborhoods of Willesden and Killburn. These are working-class neighborhoods populated by a diverse group of people.
We see quite a lot of the action happen inside the Iqbal, Jones, and Chalfen homes (more than you might think), but there are plenty of encounters with the outside world as well. When the Chalfens enter the story, we get a clearer sense of the social setting.
First, the social difference between the Chalfens and the Iqbals and Joneses becomes clear at Glenard Oak School. Then, the gap between the liberal, middle-class, and highly educated Chalfens and the working-class, immigrant Joneses and Iqbals becomes increasingly clear as we see what life is like inside the Chalfen home and inside the Chalfenist mind.
World War II doesn't take up much space in the story as far as words on the page go, but it does take up an extraordinary amount of space in Archie's head and Samad's head. The war also works as a kind of foundation for the story because it is where Archie and Samad become friends.
Without that friendship, there isn't much of a story. So this is an important element of the setting in that it sets up the rest of the novel (we need those drum noises on that one).