What are you intending to use this machine for?
Here is the head-to-head:
http://ark.intel.com/compare/47341,83610
Since Broadwell is ~33% faster clock-for-clock than Nehalem, in single threaded tasks, the the 1st-gen i5 will be ~10% faster (assuming they can both turbo aggressively). In multi-threaded tasks, the first gen i5 will be about ~20% faster than the core-m. If you're coming from integrated graphics on the first gen core, iGPU should be a big upgrade.
My bet is that unless you're doing video encoding, heavy gaming, or heavy scientific data processing you won't notice the dip in CPU, but you WILL notice the portability, display quality, and SSD. I don't think there is a better alternative at the same price point.
Edit:
For reference, the Dell XPS 13 starts at 899 USD, often with a 100 USD promo code through microsoft store, but it only comes with 4 GB of RAM and a 128 GB SSD, although the CPU is a higher performing non-fanless broadwell ULV chip. To get the larger SSD and the 8GB of RAM you'd need to spend over 1k USD. I'm extremely impressed with the UX305 at its price point. I've recommended it to two of my friends who needed new laptops. They do basic computer stuff (email, web browsing, videos, documents and spreadsheets, one of them does a little python for some text analysis) and they were coming from 3-4 year old mid-range toshibas that were chintzy, heavy, had garbage displays, not enough RAM, and slow spinning disks. They have both been blown away by the improvements in the UX305.