I would probably look at an all aluminium or magnesium jobby for a ligthweight kit car. Although priced probably out of your price range, an N52 would be good. In a Z4 3.0Si the N52 produced 265 BHP and sounds great.
Although an old engine now, the S14 from the first generation M3 would work great in a lightweight kit-car, but talking £2000 upwards and it's an I4 rather than an I6
Not sure of engine codes but maybe an I6 2.8 from the E46 or E46. Or an S50 or S52 from E36 M3, again talking more than £500 though