Listen to people who have been there and done it, if you want a cheap track toy don't fuck around swapping engines etc, just buy a car that has the engine you want in it already. For £1000 you can pick up a scruffy but decent RST, and it will be ready to go near enough. Why struggle to put in an engine that has LESS power than a std RST with a filter and 'zorst in the first place?
plus if you break anything it's a pain in the arse having to get bespoke parts again, just buy a cheap car, you can get a Mk5 RS 2000 for wel under £1000, and they are fantastic cars out of the box and very very reliable, have all RS spec suspension, 150BHP and everything else to match it.
Don't take this as me having a dig, but be smart with your money, don't try and flog a dead horse of a car, I have done as have many others, it will cost you at LEAST twice what you are budgeting, if not more

Trust me on this one.
There are loads and loads of great cheap track car bases out there for well under £1000