Hi,
First of all, welcome to the forum.
You should be able to pick up a (relatively) low mileage MKIII for £1200.
As you have said, the cambelt is an important factor to take into consideration, but I would also throw front top wishbones into that. Having said that, you can ge these for about £60 on Ebay and, if you can fit yourself, they are not too much to worry about.
Check also for PS fluid leaking onto the alternator as this will cause premature alternator failure and they can be expensive.
One other thing is dash needles not lighting up properly and the LCD display for aircon going black.
I have owned my MKIV since March and other than that, they seem to be pretty bullet proof. Mine also has 213,000 miles on it and failed a recent MOT on, a balljoint. I am sure that an owner with a few years experience will be along soon with a more comprehensive list of what to look out for.
Oh, BTW, I see you are not too far from me so if you need someone to come and have a look with you, just shout!