How much to pay neighbour for theft

[tippietoppy2]

We live in London in a converted building where there are several flats. We had some guests over to the communal garden, and during the visit one of our guests must not have secured the side gate properly (for a max of 30/45min). Our neighbour later said their bike, which they had secured with a bike chain, got stolen (they told us thief cut through chain with bolt cutters).
We were very apologetic to our neighbour, and asked if we could contribute towards the bike. Our neighbour has sent us an invoice for the bike purchase of £525 from 2017 and their bank account. They asked us to send them £550 to buy the current model.
We feel terrible their bike got stolen. We want to be a good and considerate neighbour, and want to contribute financially towards the bike. But TBH I was shocked by the amount they are asking for. We were not expecting to buy them a brand new bike. It's not like we stole the bike ourselves. We are not familiar with the bike involved, nor seen a police report for the theft.
We have not even bought brand new bikes for ourselves or our kids ever, always purchasing our family bikes (and even our children's buggies) 2nd hand. We also don't have the budget to pay them £550.
Our neighbour is evidently extremely wealthy with multiple kids in private schools (we are an ordinary family with kids in free state schools). Possibly they might not understand £550 is a huge amount to a normal family.
How much is fair and reasonable to pay towards the neighbours stolen bike?
a) £550
b) £275 - half the price of another brand new bike
c) £250 - full cost of a 2nd hand bike (eg buy same model on ebay/gumtree)
d) £125 - half the price of another 2nd hand bike
e) see if they can claim it under their home and contents insurance, and we contribute towards the excess. The bike was chained right outside their front door. Although I suspect they probably didn't report the theft to the police
f) £100 - goodwill gesture
Any other idea's or suggestions appreciated. Would like to try to resolve it so we all feel comfortable and happy.
PS The Freehold building insurance doesn't cover personal property

I think the real reason that you've back down here is because you are scared of the neighbour, I'm not blaming you for that, no one wants to get on the wrong side of a nasty neighbour

"Decision: make a goodwill offer to our neighbour. They can use it how they like. I agree we should be asking to see the police report, their insurance details etc. Our neighbour is not a friendly guy. I don’t want to drag out a situation that could create tension. I am taking his word about the bike theft, and trust he wouldn’t raise it if it wasn’t true."

YOU ARE MAKING A ROD FOR YOUR OWN BACK HERE. HAVING GOT MONEY OUT OF YOU FOR NOTHING, HE WILL BE BACK. LIKE THE STEREOTYPE BLACKMAILER.

Seriously, don't do this. It sounds to me that you feel intimidated by him, and think that 'playing nice with the other kids' will make him play nice. It really isn't. He'll see it as an invitation to screw you over as often as he pleases.

Please don't do this.

Also any money could be seen as an admission of responsibility.....

He sounds simply a bully.

Which then may lead him into putting pressure on you for the rest of the bike price.

I would not do this.

Also dont volunteer to pay his excess!!. Whe we lived in London, our contents excess was 400£....