Anyone know where i can get a stack of something like 1.25" wooden tiles (ideally not ply or MDF) on the cheap in the UK?
a) Try searching for "wooden craft shapes" or similar, there are lots of suppliers online. Such as these guys:
Or these guys:
Both of whom I think I've ordered from before but can't remember for certain.
b) If you're not happy with those prices, then I wouldn't count out ply so quickly. There's crappy B&Q ply which is to be avoided, but if you can find a local supplier of birch ply, it's actually pretty decent stuff and finishes fairly well.