Britain could be invaded if necessary, but not for a long time. To invade Britain, Germany would have to win their other wars against France and the USSR, as well as conquer the Suez Canal and control at least part of the Middle Eastern oil fields. With their problems on the continent solved, if Britain hasn't negotiated yet, they could use the resources of the entire continent of Europe (preferably under German control or influence by now), and build up their Navy at a faster rate than Britain can. After about 10 years of naval buildup (say by 1950-1955 if they won the war on mainland Europe by 1941-42), they would be capable of invading Britain. This is consistent with the time it would take for the completion of the OTL Plan Z that envisaged a similar buildup (except in this case Germany would have more resources at their disposal because they have won their continental European wars). However, this is of course the slowest option, and it would be much more preferable to bring Britain to the negotiating table.
EDIT: Forgot to add, at some point after (maybe before) their victory in Europe, the Germans (and their allies/puppets) would also have to take Malta and Gibraltar with naval and airborne forces. This isn't to cut off British shipping- in fact it would have no effect because the British had already sent their shipping around Africa ever since WWII started. The purpose of taking the 2 outposts would be to allow Germany's own economy, logistics, and trade routes to run more efficiently by removing those 2 territories as thorns in Germany's side. It would allow German ships to pass freely between the Western Mediterranean, Eastern Mediterranean, and Atlantic. That the Germans would gain experience in amphibious assaults is just a bonus.