OP terminated the pregnancy. Personally, as a Roman Catholic I don't approve, however this was OP's choice & she probably had her reasons for not bringing a child into the relationship. I agree, she could have continued with the pregnancy, but social housing is at a premium & she could have faced being in temporary B&B accommodation for some time while waiting for social housing. Also, having her ex's child would have tied her to him via the child for at least the next 18 years, if not for life, having to meet him at significant events such as wedding etc. I can only think that she considered all her options before terminating the pregnancy & decided this was the best way to go. Her choice no matter how other's may feel about it. I don't judge.
I get that the ex is probably disappointed, possibly angry at OP for terminating the pregnancy & probably he very much wanted the baby. However, the relationship isn't working. OP hasn't made any formal contract to pay for the upgrades on the flat so legally isn't liable - only morally as she did say that she would pay.
The ex is going to get a flat/house that will be his. OP isn't going to benefit in any way from the improvements. It seems that the ex isn't willing to let her say 'OK so I'll take the movable goods to the value of my half' he wants the cash.
If it was me I'd give him his blinking money if only to make a clean break & have done with it all. It's only about £1500 that he's asking for after all - not a huge sum in the overall scheme of things. Though from what she's saying about custom made blinds, white goods, carpets & flooring, I doubt if he only spent £3k.
At the end of the day OP was only asking our opinions. She's dealing with the breakdown of a relationship & a recent termination of a pregnancy so is probably feeling rather vulnerable & needs MN to give whatever helpful advice & support that we can give as a community.