In 1984 SAW had been using the Marquee Studios, but the equipment was old and breaking down so Mike proposed building their own studio. Mike and Matt knew of some available premises at the Vineyard in The Borough, Southwark. They managed to persuade Pete Waterman to rent the place and they started building the studio in January 1985.

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The year started off slowly musically for Stock Aitken Waterman, as their first release that year, Hazell Dean's NO FOOL (FOR LOVE) stalled frustratingly at #41, just like her previous single did. However, this was overshadowed by Mike, Matt and Pete getting their first number one single, as Dead Or Alive's YOU SPIN ME ROUND (LIKE A RECORD) finally reached the top spot nearly four months after its release. Dead Or Alive won further hits with LOVER COME BACK TO ME, IN TOO DEEP and MY HEART GOES BANG (GET ME TO THE DOCTOR), all taken from the SAW-produced YOUTHQUAKE album.

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Fellow Goth-rock band The Danse Society also hoped to benefit from the magic SAW had weaved with Dead Or Alive, but SAY IT AGAIN failed to chart, as did Canton's STAY WITH ME and Rin Tin Tin's SHAKE IT!.

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By March the studio was almost fully operational and SAW took on an act called Brilliant, who were signed to Warner Bros. A very different SAW sound was apparent in the debut single from Brilliant, a band that featured Jimi Cauty of The KLF and future top producer Youth (The Verve).