The strange voltages you have measured do not conform to what we would normally expect, which is:
Terminal 2 = Neutral (Blue)
Terminal 3 = Switched Live (Yellow with brown sleeve)
Terminal 1 = Live (Red)
As a result it would appear that they are not connected as they should be at the other end.
From your readings, we suspect; that possibly the neutral is not connected to a neutral, but this won't effect the operation of the new thermostat as it doesn't need it anyway. So it would be insulated and tucked out of the way
Also, it's possible that the switch wires are transposed, which again won't effect the operation of your new thermostat because it is just a potential free switch.
If and only if, the present thermostat is turning the heating on and off correctly, then moving the existing switch wires (presently in terminals 1 & 3) to the new thermostat switch wires (Common and On) as you state above will achieve the same thing.
But I think it would be wise to have someone check out the rest of the installation just to be on the safe side.
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