Hi 
Mark, thanks for raising this.
Those virtual business addresses in London are primarily for people who want to give the impression of being a London based business and when post is sent there they have it forwarded to their real address, typically for a fixed monthly fee.
Firstly, it's not a Google Play condition that you have a London address, so if you were going to go down this route, you'd be better off signing up with a similar service in a smaller town - for a much smaller fee.
Secondly, you probably don't actually need to receive much post, but you'd typically be paying the same kind of fee that any business would pay who is using it for heavy postal volumes - as these are typically fixed monthly fees.
You do, however, need for the owner of the address to be happy to receive any post addressed to you (e.g. Google or someone who wants to sue you because your game turned them into a psycho or something?) and for that purpose you might know someone who's happy for you to use their address. If you have an accountant or solicitor they will often be happy to operate on this basis for you, either for free or on the basis of a small handling fee for anything that does come through the post.
One thing to be wary of, if you go down this route, is that some marketing firms will trawl for data like this and put the address on junk mail lists, so your friend might end up handling more post than they had anticipated. If they're in business themselves they will normally be able to recognise 95% of the junk and bin it straight away, but if you've agreed to pay them per item you should be clear that you won't pay for obvious junk.
Hope that helps someone.