Thanks for the reassurances. I'm unable to get into the branch until next Friday but I have spoken to their fraud department and I was lucky the last time I tried a really nice representative took the call and really tried to help me. But I'll still need to go into the branch and show my localbitcoins.com activity and prove that the bitcoins were given to the buyer.
I will update you on the results. In the meantime any more practical advice would be appreciated especially from anyone who has faced such a situation with a UK bank before.