Hello Sarah, I'm Keith and happy to help you with your question.
If you make a capital loss it can either be offset against any capital gains in the tax year the loss was made or carried forward to future tax years. You do not have to utilise all the loss made, if you do not use it all the balance is carried forward. So, in essence, I have answered your question; yes you can offset a loss against a gain. Please remember that you have an Annual Exempt Allowance (AEA) of 11K so losses should only be used to reduce gain to that position to avoid losing this 'Use it or loose it' allowance.
Assuming that you lived in this house as your sole or main domestic residence for a period you may be entitled to Lettings Relief (LR) of up to 40K. The loss on your bungalow will be in general terms 230K + 10K + 10K = 250K - 215K = 35K loss. Your question has the loss figure slightly wrong.
The London flat, which you say you have never lived in will not attract LR so the gain would be 600K - 275K = 325K. Knock off the AEA of 11K gives 314K. Offset by the bungalow loss leaves you with 279K liable to Capital Gains Tax (CGT) which will be levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the year of sale. Forget about the mortgage, it does not come into the CGT calculations. The interest element is, however, allowable to offset the rental income for UK Income tax.
I do hope I have been of assistance to you. This is only a very general answer as far as the calculations go, but it will give you an idea of your position.