If it's been over 90 days since your last sale, even if you're an old member with thousands of feedback, Ebay holds your money. Especially with such a large amount.
For £1200, and a large item you can't post, ebay is too dangerous. I wouldn't mark as not dispatched. Let the hold finish, and contact ebay to find out when your money's free.
Now, the real threat is the 180 days for a refund if he paid via PayPal. Technically he could do a charge back if he paid by credit card, but you should be safe from getting scammed after 6 months.
If it comes down to fighting a case, you have pics to prove he took it. If he sent messages claiming he got it, then he can't claim non-delivery. Only "item not as advertised", and he'll need to return the bike. If he does, make sure it's the same bike.