We bought an SUV style car as we found that two Stage 1 Isofix car seats when tilted [for a child to sleep] meant that a tall driver couldn't push the seat back far enough to drive.
We drive less than 3000 miles a year and use it mostly to leave London so we are not terribly concerned about the detrimental impact on the environment. We commute by bike/train, walk my daughter to school and our shopping is delivered pretty much everything is deliver tbh
We used Zipcars for ages but needed a car for reasons I am not going into on MN as there is no point, the SUV Nazi's will tell you that you can all safely pile into a Ford Ka with two kids seats, which you can but not in a lot of comfort and certainly no-where to stash anything other than an umbrella fold pram
All the signs are that diesel cars are going to be subject to additional taxes within London at least so I'd do some research on that.
An estate is a bit of a sod to park depending on where you live. We've hired a Qashqai on holiday and it was v spacious even with kid seats but not isofix ones. They definitely add inches.
So it depends on what age your children are, how frequently you need to use the car etc etc. and what for. The SIZE of your car has bugger all bearing on London's congestion or pollution. How frequently you use it does.