You won't get much Bandit for £500 maybe a really shagged early one. If you try to buy a bike in demand with a shoestring budget you will buy a bag of problems, better off looking at stuff that gets overlooked.
Some stuff that's not the arse end of Scotland (far end of jockland bargain bikes, owner "works on the rigs" are a common scam btw so be careful).
GSX750f (think this same as Trev posted)
http://www.ebay.co.uk/itm/SUZUKI-GSX...item3cede5f16c
FZR600 (needs some work but is cheap as chips_
http://www.ebay.co.uk/itm/YAMAHA-FZR...item3399506616
GSX600F (some idiot tried to streetfighter it, runs though and original fairings could be found on eBay to return to original)
http://www.ebay.co.uk/itm/1989-G-Suz...item1e9586ec9b
CBR600F (had a hell of a lot of work done, auction may run beyond your budget)
http://www.ebay.co.uk/itm/Honda-CBR6...item3a9cd45550
KLE500 (Has MOT but needs new rear shock, good winter bike)
http://www.ebay.co.uk/itm/FAR-TOO-GO...item462bbe476f
CB-1 NC27 (You may get lucky on auction, 400cc naked screamer with the gear driven cams like the nc23 uses)
http://www.ebay.co.uk/itm/HONDA-CB-1...item4ae10787e2
VFR400 NC21 (another naked 400, this one uses the v4 engine)
http://www.ebay.co.uk/itm/1987-HONDA...item27f24f420a