Yes, 1700 engines exist and come in low compression (Sonett) and high compression flavour. A std. 1700HC engine gives a nice bit of extra bottom torque compared to a 1500. Search the forum, many threads on this topic.
The car at the auction sold for £3100 according to the website. I think that's a really good deal if the car is as good as it looks and sounds in the description. The BSA went for £3200 - too much I think which is good as I would have been gutted to have missed it if it had been a bargain!