There have been a few posts recently about the spacing of characters on number plates, as far as I know it's still illegal at present to incorrectly space your characters on the plate, as far as I'm aware it's all to do with ANPR and its ability to read the plate correctly.
Some posts I've seen recently, suggest that DVLA will be relaxing these rules - possibly as ANPR gets cleverer at reading plates.
As for it looking cheap, in my opinion some plates look better correctly spaced, some look better without, it’s really up to you, do it and see what you think.