OK - got to thank my girls. Even though I don't really want to.
Spoke to three of them last night about the situation with him. As they are not blinded by lust as I am they gave me a bit more of an objective view -
1. Are you sure that he's not going to buy another house with her?
2. Are you sure he's not just selling the house because of the financial climate?
3. DO NOT MOVE IN WITH HIM.
4. Could you be with him knowing that he cheated on her with you?
5. Would you ever be able to trust him?
This did bring me down to earth with a bump. Obviously it's not what I want to hear but would my friends be worth having if they didn't raise these important (and sensible) questions/issues. I doubt it.