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I’d be inclined to agree with the last comment (and others) £1000 is too low. I started out as a hobbyist doing projects for the sub £1000 market and it never works out. You always end up out of pocket..

The biggest mistake I made was not taking in to account the time for planning and rolling the first years hosting in to the development. I suppose it depends on the project stock value and estimated Return of investment as much as the complexity of the site.

Always use a contract too and make sure that it is clear what your obligations are to each other and in an ideal world agree a 50% deposit.

If you provide hosting provide them with an SLA or beter still encourage them to pay for their own hosting and charge them a management fee to look after the server for them. Then they can’t kick your ass when (not if) they loose service for 10 minutes on a sunday night.

It does depend on the quality of your work but that doesn’t mean you should end up out of pocket