Agree, lack of correct readback is dangerous! Technically speaking its kind of a runway incursion isn't it, since you were in doubt and wasn't sure if he would wait for the line-up AFTER the landing traffic!!!
Guess the UK CAA rules are a bit different from some ICAO rules, well seems to be in this case with conditional clearances. ICAO Doc. 4444 Chapter 12:
12.2.7 Conditional phrases, such as “behind landing aircraft” or “after departing aircraft”, shall not be used for movements affecting the active runway(s), except when the aircraft or vehicles concerned are seen by the appropriate controller and pilot. The aircraft or vehicle causing the condition
in the clearance issued shall be the first aircraft/vehicle to pass in front of the other aircraft concerned. In all cases a conditional clearance shall be given in the following order and consist of:
a) identification;
b) the condition;
c) the clearance; and
d) brief reiteration of the condition,
for example: “SAS 941, BEHIND DC9 ON SHORT FINAL, LINE UP BEHIND”.
Note.— This implies the need for the aircraft receiving the conditional clearance to identify the aircraft or vehicle causing the conditional clearance.
And how many times shall an ATCO ask for a correct readback?? Untill he reads back 100% what was said? I would in this case ask him once more as you did or perhaps a second time pending my mood, and if I wasn't satisfied I would instruct him to cancel last transmission and HOLD POSITION. We're just trying to be flexible and expeditious but if they don't want to play along then hold and wait until its safe to proceed.