It isn't necessary for the sentence, but it means the person is somewhere south of London. So if you were in Spain, you might say "What's new up in London" and if you were in London, you might say "What's new down in Spain?". But both sentences work just fine without the "up" or "down".

it's from "what's up?" phrase

It means up as in a northerly direction. While the question 'what's up?' exists, the question 'what's new up?' does not, so that is not the meaning here. Actually, in Dickens's day, it was usual to refer to London as 'up' whatever direction it was. Towards London was up and away from London was down. This is still the case in the UK within a certain social class.

This use of "up" is idiomatic. There are many valid interpretations what it might mean. You can only know the meaning with the help of additional context. One possibility is that it has a directional interpretation, as explained by Tom. Another possibility is that "what's up" refers to whatever is happening, as shevelen stated. Still another possibility is that it refers to something disturbing happening, as Jade mentioned. If you are calling somebody in London from another city, then saying "what's up in London?" can simply mean "what's up?" or "what's up where you live?"

'Is anything up?' is a phrase which can be used to ask someone about their plans or activities. Here it means: 'Is anything new happening in London?' It can also be used to ask someone if something is wrong, depending on the context.