Why does the difference cost £1000? The electric assist bike conversion kits I see in the US are $300-500. Are the purpose-built ebikes tons better than the conversion kits?
Because it's not an honest comparison. A £500 bike is still a relatively budget adult bike, and an ebike is a relatively luxury product still and is probably more comparable to a £1,000 normal bike.
Decathlon (giant French sports chain) sell an ebike for £650.