Well I can't say much about the price - don't know the British market. I probably I wouldn't pay that much for such an old computer. But I wouldn't buy a new PC neither🙂
Nevertheless, it may still serve you for a while, so you gotta weigh in all the factors.
Example: in spring 2012 I bought my girlfriend a 2006 white Macbook (originally bought y the owner in 2007). It cost me around 150 pounds - including a charger I had to buy on my own. It was in good condition. Last fall the small cracks on the hinge started to grown, so I took to Apple and they fixed it for free - they've exchanged the whole bottom including the keyboard, trackpad + screen frame... So now it almost looks as new🙂
Don't know if they do that for Airs (white MB's also had the flawed hinges thus the free repair).
What I'm getting at is: if you could negotiate the price to 200 pounds that may be quite a good deal. It also depends on what you're planning to use the MBA for.
My girlfriend uses her white MB for Word, Excel, occasional photo editing in Picasa + the usual web stuff and the 2GB, Intel Core 2Duo Mac suits her just fine. It still has battery left in it, it sustains her frequent traveling and it simply... works. I plan to get 1 more year out of it and buy her a new Mac. But even if it broke down now, then it still was I good deal in my opinion - since she has the Mac, not once did I hear her curse while using a computer🙂
But like with all used merchandise - it's a lottery, more or less. Inspect the hell out of it and negotiate all you can.