I bought my Giant Boulder reconditioned from
Lunar Cycles for £75 last autumn. Brought my bike back for some tweaking after a couple weeks (brakes, gears), due to new cables, and they were very helpful. Still is rolling nicely. Their website now says £100-£200, so don't know if they've put prices up or something. Did have to wait a bit for a man's bike (need to ring and ask if they have any going). If your friend had anything specific in mind, then s/he might need to wait longer depending on luck...
Haven't been anywhere else, but
this blog mentions a couple shops.
There are a couple London shops towards the bottom of
here, which sell...
I've stumbled upon
http://www.stationbicycles.co.uk/ recently...
I hope I don't hijack the thread with this question - is the blog accurate, i.e. certain shops being pushy nowadays, etc.? I might be interested in a bike for the gf (and perhaps a nicer bike for myself!)...