I'd personally spend around £100 on the AVR, and £130 on speakers, if you keep your eyes peeled you might even find an AVR cheaper. Like I said before Yamaha and Onkyo are the best budget stuff, you could have a look at new prices and try and find them on the bay, alternatively look for whatever amps fit in your specs and buy what you can.
What you need to ask yourself is:
How many channels will you need (5.1 for now, but possibly 7.1 or 9.2 in the future?)
What are you going to be putting in? TV, MP3, PC, Console, etc. You need to find something which has enough inputs for them all.
What inputs do you require? HDMI, composite, etc. Make sure you have enough of what you need.
After that in the budget range there really isn't much to separate them. One thing I can't stress enough though is, if you have the chance, get one with both a remote
and a setup microphone, balancing speakers can be a real headache but using a setup mic makes it all automated. Loverly
Speaker wise I'm really not the best person to ask, I've chosen to go the route of retro stereo speakers + a centre but as you've said you can't have big speakers this isn't really a great option for you.