Hello fellow Brit.
You need to select seller's standard rate, but then you need to specify what this rate is. What I do is select 3 domestic services, 1st class, 2nd class and collection in person. Then I specify how much I'm going to charge for each one in the next box (remembering to put 0.40 for 40p otherwise it ends up as £40!
). It would seem normal to charge actual postage plus £1 to cover packaging, handling (going to the post office), and Ebay fees. I personally don't agree with over-charging on postage but I wouldn't worry too much too because plenty of other people seem to be getting away with it.
If you're going to be selling a lot on EBay then you definitely need to get hold of some scales, kitchen scales will do, and familiarise yourself with
www.royalmail.co.uk.
I hope this helps