We're back to "that's where all the well paying jobs are"; given that they spent £750k on the land before even building the house, they probably can't maintain that lifestyle with a non-London job, and commuting in from greater distance is pretty gruelling.
High-density urban living is far better for the environment than rural. People usually live in less space, and with far less outside surfaces, reducing energy usage for heating and cooling. Distance to work, shopping, and other destinations is shorter, and use of public transport is far higher. Far less land is wasted on manicured single-family lawns rarely used. Density also allows sharing of rarely used manufactured goods between a neighbors or via renting (power tools, washing machines, even cars).