Building From scratch

thanks peter carter some really good advice :D doubt il need to ask about bike fit again :D
how much should i spend on a frame? £250 - £300? (£800 budget in total)

Could get yourself a Bob Jackson Vigorelli for £345. Brand new in a colour scheme of your choice.

http://www.bobjacksoncycles.co.uk/product_info.php?cPath=28&products_id=307
Not exactly an original choice, but they are great to ride and the geometry is really nice (IMHO as happy Bob owner).

Then maybe £155 on a set of wheels ie.

Suzie promax SB 32H £30/(rear) £35 (front) here
http://www.planet-x-warehouse.co.uk/acatalog/Online_Catalogue_Rear_231.html
http://www.planet-x-warehouse.co.uk/acatalog/Online_Catalogue_Front_232.html
Rigida Aero rims £23 each
http://www.parker-international.co.uk/11147/Rigida-DP18-700c-Rim.html
Competition spokes £44 for 80
http://www.parker-international.co.uk/5245/DT-Swiss-Competition-Silver-14-15g-Spokes.html
(if you build them yourself)

thats £300 left for drive chain and finishing kit.

You could build a lovely bike from quality new parts for 800 notes.

NB: My build started like this and ended up just over £1k (I Blame Campagnolo)