1 I am looking to do a chat room that is only going to over a local area in England this chat room with be like a dating site or a meet me site just for local people in a 60 mile radius I have been looking at badoo I am after a site like that
I don't think you're going to find one. Why would a chat server administrator limit connections to his server? He wants more users, not fewer. If you use an IRC client (there are many free ones for Android, Windows, Mac and Linux), you can usually find a channel for a particular area. If not, you can create one. (Just join, say, #Bristol, and there's a channel [room in your vernacular] named #Bristol. That won't keep people in Japan from joining the channel, but most channels with locations have 90% or more of the people in them either at that location or people who used to live there.)
2 is there sites like the above for building your chat room I mean you log into a control panel and you do the design yourself
No. You use existing irc networks. Creating your own chat server takes at least a little programming skill and a lot of experience. (And it's lot of work. I've had 40 hour/week paying jobs that were easier than running a chat server at times. It can get very hairy.)
Your best bet is to download or install (desktop or phone) an IRC client (search in Play for irc, then try a few, or download
mIRC for Windows. (I don't know the current favorites for Mac or Linux, since I haven't used either for chat in many years.) Connect to a server (most irc programs have server lists) and /list. That gives you a list of channels currently populated. Choose one that looks interesting and /join it. (The # at the beginning of the name of the channel is mandatory. You can't join channelname, you join #channelname [or &channelname, if the channel is local to the server (which has nothing to do with being local to a location - a server in Sweden could have a local Australian channel)]) Hang out, talk to people and learn.
You'll soon see that many people get on IRC and immediately want to start their own channel. Those channels last a few days, then they give up and forget about IRC. Use it as a way to talk to people. When you and a bunch of friends want to branch off to your own channel, you'll have something that can work.
Freenode is one network that has a lot of technical channels. Every project seems to have a channel there. I just connected to Freenode and listed the channels - there are currently almost 30,000 channels being used. And that's just one network. Dalnet, Undernet and Efnet are 3 of the oldest and largest nets, but there are dozens (at least).
You say you want something local but we don't know where you are, so we can't even guess, but there are a few networks that are sort of local. (For example, Austnet is mainly Australian, but I'm in the US and spent months there.)
So get on, go to a few channels (you can be in more than one at a time comfortably on a PC - it's a little difficult to do that on the limited screen of a phone) and read what's happening. Some channels are friendly to all, some are almost hostile to newcomers, some are very strict with the rules (repeat something a couple of times and you get kicked out), some are so lax you'll think there aren't any rules. It can be a lot of fun - but it can also be very addicting. And don't take anything that happens personally. There are idiots everywhere, and you're going to run into some. Don't get pulled into a fight. There are usually people running the channel and if someone goes too far, they'll take care of it. (Besides, it's just words on a screen - no one's going to come knocking at your door if you ignore his taunts.)
