3 years ago, £500 might have been a realistic figure but I'd put it closer to £800 now for a complete bike. The price of mountain biking bits has gone up massively in that time period.
The more you pay for a mountain bike, the better the fork you get and I would argue that you should spend more on the fork than the frame! At least look for a Rockshox Tora as the baseline, a Rockshox Recon would be better. The cheaper Rockshox (Dart) and Suntour forks are just not worth bothering with: you will be looking to replace it within the year.
A 29er fork is (probably) more expensive than a 26er fork, just due to them being a bit more niche.
For £800, you could buy a Genesis Altitude 00, which has a decent steel frame, a decent enough fork and good quality parts (mainly Shimano Deore). Genesis are sometimes heavily discounted, so you may be able to find last years model for less.