Born in Newcastle upon Tyne, Tyne and Wear, Ferrell began his career as a trainee in the youth system at hometown club Newcastle United, before signing a professional contract on 5 December 2002. He was released at the end of the 2003–04 season without making an appearance for the first team although he had impressed for the reserve team, scoring 11 goals in 21 starts. He signed a one-year contract with Watford on 7 July 2004, where he made two appearances in the League Cup in the 2004–05 season, scoring the winning goal in the first round against Cambridge United.