Ok here's the deal. This will be my first PC I will have bought for playing games, and I was wondering - seeing as I am on a tight budget - if it would be possible to build a PC capable of playing Skyrim for ￡300 to ￡350 (around $500) on high settings with no lag. Any replies or help would be greatly appreciated as I don't want to throw the money down the drain so to speak.

Pick up this months Maximum PC, they have budget builds for gaming machines. It might already be archived on their website.

However, unless you have carry over part, like a monitor, keyboard, mouse, optical drives and possibly a case, $500 is not going to build you a gaming rig.

Yeah, Skyrim on high you'll be looking at 600ish Sterling, minimum, excluding monitor, speakers etc.