Sounds like the the way to go as long as the other engine is a genuine good runner, you will pay more than £400 in parts, headbolts, skimming, gakets and other sundries rebuilding your own head if you decide to go down that route. And £200 notes for an engine swap sounds good to me. You might want to ask how long ago the donor lump had a cambelt, if you don't get the answer you want backed up with reciepts, assume it has'nt been done and factor the cost of a cambelt, tensioner and water-pump into the cost of the swap, it may seem overkill but it's cheap insurance on these lumps. Also if you can drop the sump and take a few rod caps and main caps off before to inspect the bearings before you hand over money, there are a lot of shonky lumps about now and unless you can hear it running take nothing for granted.

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R H Davey Welding Supplies. I sell new and used welding equipment in the Hampshire area. I take on welding jobs in the evenings, ally casting repairs are one of my specialities but I can weld pretty much anything. PM me with your requirements.

Some of my services: (See my for sale threads)
Engine mount/chassis repair
Solid Beam Mounts BACK IN PRODUCTION
Harness bars