Thanks Jen, that confirms what we have tested and what ebay are saying.

However I am still trying to find out whether listing with the iphone is different as I do not have an iphone.

Ok, I think we have found the problem.

1. As jen suggests, some sellers do not select NO POSTAGE in the drop down first.

2. The iphone app is not allowing pick up items to be listed without showing free postage.

A shipping option needs to be selected then domestic, then local pick up. Free Postage 

appears with an ON and OFF button. This button is not selectable whereas it should be.

So until Apple rectify this, listing Pick Up Only items is best done on a PC.

Seems a bit strange that the issue has only appeared on a large scale & affected so many sellers just in last few days ?:|

It does, if apple have been playing with the app, maybe the On and Off for free postage is a recent glitch from cross programs that hasn't been picked up.

I am reporting it to Apple in case.

Thank you for that  information i shall check mine out 🙂