After the withdrawal of Mt. Gox and Intersango from having a domestic bank transfer method for those in the UK, there has been a widening need for local trading.
There are two exchanges that sell bitcoins and take Barclay's Pingit for payment, Blockchain.info/wallet and a new one, BitcoinFridge.co.uk, so any local trader is competing with those methods.
But for face-to-face cash trading, that is just like any retail operation where the key to success is location, location, location.
If you look on LocalBitcoins for London, there are a couple traders showing a history of completing hundreds of transactions, and the vast majority of the remaining traders with just a handful of completed trades. Without knowing the timeframe for that and average purchase amount it is tough to compute earnings (profit). It appears that there isn't much more liquidity above a 7% deviation from the market price, so that will be a limiting factor.
But there is an increasing level of local trading occurring, and buyers gravitate towards sellers who are established. So starting sooner rather than later gets to that "established" level before the latecomers.
Also, there may be an opportunity to serve as a broker to other traders. For instance, casual traders may have orders too big to accommodate themselves, but could fill the order with an affordable local source of bitcoins that are sold in larger amounts for maybe just a few percent premium over spot. That's possibly where the biggest opportunity lies (albeit it would also be where the largest capital requirement, for inventory, is necessary as well.)