I'm pretty sure PowerDNN has a UK location now.
As some hosts put limitations on general file storage and database size I need to know if uploaded images are stored in the database? Or will they be classed as general file storage?
They are stored on the file system.
4. Are there any other factors I should be taking into consideration - e.g. memory, no. of portals?
This is difficult to evaluate. As you add more portals your memory usage will increase. Your biggest factor will be the number of concurrent users. I've seen as many as 100 in a shared hosting environment. Anything more and you will probably need to consider a dedicated or virtual private server. FYI, I'm referring to just a standard DNN install. Active Social will add a little more overhead, but not much.