Another suspect, aged 18, was arrested Saturday morning in the port of Dover, a major ferry port for travel between Britain and France.
The man, 21, was arrested just before midnight Saturday in West London.
The man was seen on camera leaving a house which police later searched.
British Home Secretary Amber Rudd dismissed US President Donald Trump's tweets in the wake of Friday's terrorist attack in London as "pure speculation". Neither has been charged.
The UK arrested a second suspect in connection with a blast on a commuter train as London's counter-terrorism police widened their investigation into the attack that injured at least 30 people.
"(We must) "make sure to take all steps that we can to ensure the sort of materials that this man was able to collect" are harder to find, she said.
The "severe" level means another attack is highly likely but the higher "critical" level means an attack may be imminent.
"This continues to be a fast-moving investigation", Commander Dean Haydon said in a statement.
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The respected couple are known for their work with refugee children, and reports have claimed the arrested suspect was an Iraqi teen. Local residents quoted in British media said the owners of the house were elderly foster parents who had recently hosted refugees from conflict zones.
Members of Yahya's family confirmed to ABC News that the man in the video was Yahya but said they had not yet been contacted by authorities about his arrest. Sky News and other British media named him as Yahyah Farroukh, who is originally from Syria. It said he began attending courses when he was 17 to learn English. Police said they were searching four addresses in relation to the attack.
The United Kingdom has been hit in recent months by a wave of attacks which have made thirty-five dead, in a context of multiplication of attacks, jihadists in Europe.
"You always think foster kids are going to have a bit of trouble, but you don't think terrorism", he added.
The grainy footage shows a young man in a grey tracksuit carrying a bag that looks like the Lidl supermarket bag that contained the bomb. "These are sick demented people who were in the sights of Scotland Yard" within hours of the Parsons Green explosion. Most of the injured suffered burns.
Islamic State militants said they were responsible for the attack although both British and US officials have cast doubt on the claim, saying there was no evidence any recognised militant group had ordered or organised the bombing.
Britain's official terrorist alert was lowered to the second highest level, suggesting police have disrupted the network behind the London bombing. Three were the work of attackers motivated by Islamic extremism, and one by anti-Muslim hatred. The last time Britain was put on "critical" alert was after a suicide bomber killed 22 people at the Ariana Grande concert.