As far as I can tell, you are right about the home brew shops in London. There is the one in Mattock Lane Pharmacy (which is really close to me) which is very expensive and doesn't have very good stuff. There's also an internet shop that does allow you to collect at their base in Harrow, but they don't do a lot of grain. So there is certainly a market to be tapped into.
In terms of the cost, you can get 23 litre brews online for around the same price (slightly more in most cases that I've looked at) but that's simply because they are larger companies than you are and can buy in bulk in a way you can't. Having a premises may solve some of this (I'd prefer to buy from a human, rather than a webpage), but your costs will go up. I have a friend who is starting to dip his toe in selling craft beers and, like you, has started at markets on Saturdays and Sundays (In Wanstead) and has just had a pop up shop in Shoreditch for 2 weeks, to test out how well a permanent shop front in London would work out. I think he sold loads, and can now work out if it is financially viable or not. Might be something worth looking into, as a test run.
In terms of the cost, you can get 23 litre brews online for around the same price (slightly more in most cases that I've looked at) but that's simply because they are larger companies than you are and can buy in bulk in a way you can't. Having a premises may solve some of this (I'd prefer to buy from a human, rather than a webpage), but your costs will go up. I have a friend who is starting to dip his toe in selling craft beers and, like you, has started at markets on Saturdays and Sundays (In Wanstead) and has just had a pop up shop in Shoreditch for 2 weeks, to test out how well a permanent shop front in London would work out. I think he sold loads, and can now work out if it is financially viable or not. Might be something worth looking into, as a test run.