If you can then go for the full 5.1 system over the soundbar. Some people don't like huge speakers cluttering up their living room. Personally I love em. Difference in sound is huge. But if you do there are some decent style packages out there
Try your local richer sounds store. All you need is a 5.1 speaker system, an AV amp and lots of cables to connect it all together.
RS are pretty good with prices, especially if you are buying more than one item. Most if not all their stores have demo rooms so can hear what you will be buying. They may throw the cables in FOC.
For example you can get the KEF KHT1005.2 speaker package and the Sony STRDG820 Amp for £400 & £230 respectively. Add on say another 15% for cables (£94) and thats a bit over your £700 budget but as i say I've always found RS to be pretty good with discounts.
If you can get away with larger speakers Superfi are also doing the Q Acoustics 1010i 5.1 speaker system for £350, so thats another option.
Whatever people advise, always go and listen to it first before parting with your hard-earned. Good luck and hapy hunting.