If his heads are good I'd just throw a new Subaru short block into it. £2500 gets you an STI short block brand new that'll take 400hp. Newer thicker wall block too.
A used EJ205 would be around £1000 if he's looking the cheapest option, but the STI block would add a bit to the value IMO
Complete with Pistons, Nitride Crank, Preassembled by Subaru Japan. JDM EJ207/N14 THICK WALL SHORT BLOCK. GENUINE SUBARU SHORT BLOCK. Good for around 380bhp as it is, any higher, look at changing the pistons.
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