I got an offer from Durham to study law this September (contextual). There are a few factors to weigh up: what firms you intend to apply for e.g. law firms are STRICT on re-sitters, good opportunities at City, location etc.
Nevertheless, the RG universities would definitely put you in a good position, but then again, law firms would scrutinize your application for TC's, vac schemes etc. Plus, extenuating circumstances play a role.
City has decent credentials so I would go, NETWORK as much as possible and hope for the best. Alternatively, if not, the gap year is in your back pocket.