Scotland Yard said the women, aged 64 and 30, suffered injuries "consistent with a violent assault" at Adderley Gardens, Eltham, at about 12:10 BST.
Mum and daughter hurt in 'horrific' hammer attack
Joe Xuereb, 27, who lives locally, was arrested on suspicion of attempted murder in Sidcup on Sunday evening.
The women, who did not know Mr Xuereb, are being treated at hospitals in south London.
A hammer believed to have been used in the attack was recovered from the scene, police said.
Neighbour Bob Gover, 69, called an ambulance for the two women.
The retired TV engineer said: "I heard a bit of a commotion, I looked outside and there was about half a dozen people out there.
"I went out there and I saw blood on the face of one of them and I knew something had happened so I ran inside and phoned for an ambulance.
"They were both covered in blood."
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