Back in the early days of US ultralights cut down motorcycle 2 strokes were pretty common.
The small 2-stroke motorcycle engines are not designed to survive at the "duty cycle" or power level that is used on aircraft.
Keep in mind that the OP is discussing a UK single-seat deregulated type (SSDR) so a maximum takeoff weight of 300 kg/661 lb and a stall speed under 35 kt/40 mph/65 kph, so a very different beast than a Part 103 ultralight. I would suggest a basic design capable of meeting the SSDR specs with a modest VW but repowered with an industrial engine and an Ace redrive. The MiniMax V comes to mind, and because there is an allowance up to 390 kg for amateur-built aircraft permitted before 2003 you might also look for an derelict Luton Minor, Druine Turbulent, or Jodel Bébé to restore as an SSDR type.
4-Stroke Performance on a Mini-Max Budget Some pilots prefer a 4-cycle engine, but a new or rebuilt 4-cycle certified aircraft engine is extremely expensive. Fortunately there are very good engine choices based on the reliable Volkswagen flat-4 air cooled engine. The V-Max is a perfect match for...www.teammini-max.com
I see you willing to keep costs down and need for technology too. My advise would be: go for car-towed gliders. It does not have to be a HUMMER to pull the glider up. We used a old Renault to tow our Bi-Swift (two-seater). Theere are good plans on the internet of primary gliders. Mike Sandlin has very good and proven plans. Goat and Bug is a good glider of him.
Gliding is pure fun. OK, you need to be a team to have flying days. A pilot, somebody in the car, somebody maybe at the wingtip (might be that it is not needed on GOAT and BUG). The flying is more pure and you will have NO trouble with neighbours who complain about your noisy lawmower engine on your airplane. So ... go soar the sky in a glider and have fun at the lowest cost possible.
Disadvantage: you need a large field to take off due to the length of cable and the car needing to ride. If you have a abandoned road, you are very lucky.
The small 2-stroke motorcycle engines are not designed to survive at the "duty cycle" or power level that is used on aircraft. This lesson has been learned hundreds and hundreds of times over the last 50 years. I'm sorry, but you are walking down a road that many people have wanted to walk, and learned it is a lot more difficult and more expensive than they wanted it to be. A lot of engine experts here on HBA can provide the technical details and knowledge I don't have..
For an off-the-shelf design that will suit the UK SSDR regulations and do fine with a modest four-stroke engine, check out Don Stewart's Headwind. Listed stall speed at gross is 38 mph, which corresponds exactly to my calculations for 110 sq ft of NACA 2412 and 650 lb gross weight. Sea level rate of climb with just 35 hp is a respectable 850 fpm per the same performance spreadsheet, so it would be a perfect candidate for an industrial V-twin with an Ace redrive. I didn't find it on the LAA approved list or find any listed in G-INFO, but it's such a conventional and long-established design I can't imagine that approval would be problematic. And it has such a nice vintage look (Aeronca C-2 style!) that you'd be welcome at the antique fly-ins as well as the amateur-built ones!
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