It does seem a little strange that no one else appears to have reported seeing the alleged act. Whenever I've seen the aircraft over this part of the universe, it has either been following the High Dyke (to the east of the town) or over to the west near to Belvoir Castle.
Here is a link to the report in the local rag.
VIDEO: Did Vulcan do banned trick over Grantham? - Grantham Journal
The location where the person claims they saw the alleged event is beside the big white tower on the high ground just to the east of the A1 and south of the town(for those familiar with the area).
Here's a link to Bing maps which shows the position of the water tower.
Gorse Lane water tower
I am assuming (a dangerous thing to do) that the aircraft was heading north at the time judging by the sun's reflections on the aircraft - perhaps a PI could confirm that. But, if that guy was standing where he says he was standing, looking at those photo clips would put the manoeuvre being carried out at low level directly over the town centre. I think if that was the case, we would have heard about this "event" a lot quicker than the three weeks it took this guy to bring it to the attention of a regional newspaper.