Did Luther support the Reformation in England? Did he think Henry was sincere? Did he think the new Anglican church was too similar to Catholocism and just an excuse to give the king a divorce?
In 1523 Luther responded to Henry VIII by saying
Of such a character is the book of the King of England, who does nothing but perpetually cast in my teeth traditions of men, glosses of Fathers and use of past centuries. He rages, he curses, he is all vituperation and virus because I wish to be considered more learned, more holy and more important than all the rest of mankind. He is not content that I allow others such things for their free use, but this new God fixes as necessary articles of faith for us all whatever has been said or done by the custom of men, which articles unless I believe, he makes of me in his furious anger a heretic, or I know not what kind of monster. Where, pray, did this new God, the King of England, come from, this Creator of new articles of faith? Till now I have heard of but one God with the right to make articles of faith and to require belief in them.
In fact this new God, who goes beyond the other madmen, brings in a new madness. For the other madmen have endeavoured to pervert the Scriptures that I have brought forward and give them another meaning; but have dared nothing without alleging and boasting of Scripture support. But this new God, marvellously confident and cock-sure that owing to his divinity whatever he says must be done, or has already been done, testifies by his own confession that he wishes to set aside my chief foundation, and leave it for others to attack, whilst he only attacks what I have built on it. He wishes with straw and hay to fight against the rock of the word of God, so that one cannot tell whether he acts so from sheer madness, or whether Henry's stupidity is innate in Henry's head, justifying the proverb: A man must be born a King, or a fool. For what fool even would say: I will prove there are seven sacraments, but I will leave untouched the strongest argument of my adversary?
I really recommend reading the letter in full as this excerpt hardly does it justice. Of particular delight and topically useful is this excerpt:
Here I will describe the doings of some kinds of foolish or mad persons that I may paint my king in his true colours. Suppose a man were so to argue as to prove because a thing had been done contrary to Scripture, therefore that Scripture should grant it to be lawful. Adultery is committed, therefore the law against adultery is heretical. I believe such a one would appear mad, even to my King; although he himself is the prince of madmen. And yet how would such a one argue one whit more wisely than my Henry argues? If indeed Scripture can be set aside by any deed, by no deed can it better be set aside than by a deed contrary to it. But my King in order to excel all others in madness proves by a fact that has no bearing on the question that Scripture should be set aside.
Two years later Luther Apologises to Henry under pressure
Grace and peace in Christ, our Lord and Saviour. Amen. Indeed, most serene and illustrious King, I ought greatly to fear to address your Majesty in a letter, as I am fully aware that your Majesty is deeply offended at my pamphlet, which I published foolishly and precipitately, not of my own motion, but at the hest of certain men who are not your Majesty's friends. But, daily seeing your royal clemency, I take hope and courage; I will not believe that a mortal can cherish im- mortal hatred. I have learned on credible authority that the book* published over your Majesty's name was not written by your Majesty, but by crafty men who abused your name, especially by that monster detested of God and man, that pest of your kingdom, the Cardinal of York.* They did not see the danger of humiliating their King.
The Cardinal of York Luther Refers to is Wolsey, implying that others had used Henries Name to publish advance their own Agendas.
Henry Vehemently denies this and advises Luther to annul his recent Marriage
the King asks whether he was not heard before the Cardinal of St. Sixtus [Cajetan] when legate in Germany; whether he has not been heard publicly disputing in Saxony; and everywhere else by his books. Doubts not that he has been rightly condemned, as Luther himself condemns the Pope and the College of Cardinals. Reminds him that his opinions ' were condemned by the University of Paris, and others, and by the Emperor at the Diet of Worms; but that he refused to submit to their judgment, and appealed to the next General Council, assembled in the Holy Spirit ; thus leaving a loophole for escape, if condemned by any future council. Defends the Pope and the papal court from his aspersions. Refuses his oflFer to write a book in the King's praise. Advises him to give up his wife, bewail his errors, and the fate of those whom his doctrine has destroyed ; and either publicly to preach the truth, condemning his former errors, or else to retire to a convent.
After this we have no other direct correspondence between Luther and Henry from this period or, to the best of my knowledge, later. Henry used intermediaries.
Now to the point of your question. Luther was consulted directly by England in 1531 as to grounds for his divorce from Catharine on the basis of Deuteronomy. Luther (tongue in cheek) suggests the only recourse available to him is bigamy. The English send ambassadors to Germany to consult with German Theologians. Luther starts saying he wont be swayed, but as previously, starts to soften.
While he far from went as far as Embracing Anglicanism and Henry, he neither openly condemned the efforts of removing the influence of the papacy in England.
Sources for further reading: Henry VIII, the League of Schmalkalden, and the English Reformation By Rory McEntegart
Henry VIII and Luther Doernburg