Living in London
Rent £700 a month
Trade Stockmarkets for a living
Not prepared to buy
£250k in bank need.
would love to get a monthly return from this lump sum which pays my rent each month (until I see a good time to enter the property market)

Or is this a bad idea as inflation will eat into my £250k??

Put simply, I think this is a bad idea because your £250k will be eroded by inflation. This is not the time to start living off your savings, especially if you plan on buying a house in the next few years. To a HPC devotee that's akin to MEWing and we all know that ends in tears.

Nice part of the country
Sounds expensive
Good, productive career you've got there
Can't say I blame you
That makes absolutely no sense
I'd love to have a ten inch *****, but it just ain't gonna happen

So your a pro stock market trader , yet you can't work out if £250k can give you £700 a month and also your asking a basic question about inflation .

Just stick with the stock trading , your a sure winner , i can tell