As others have pointed out in the comments, if your intention is to ask for a description of England and daily life there, then you would instead ask:
What is it like living in England?
Your question is fine if instead you want to know how someone is doing while they are living in England. For example, suppose my friend is staying in London for the summer, and I text her to see how she's doing:
Me: How is it living in England?
She: It's tough. I can't understand half the accents. You'd almost think they weren't speaking English at all.
"How is living in England" is also fine, and means much the same thing as "How is it living in England". The "it" here is the "existential dummy pronoun", which has no real meaning of its own.
Your first sentence is not as idiomatic, although it seems OK with a comma:
How is it, to live in England?
Your sentence #3 is not correct.