Cost of property for CGT

A client has bought a bungalow to live in as PPR. His plan is to obtain PP to knock the bungalow down and build a pair of semi-detached houses. He will then move into one and sell the other. What will be the 'cost' of the semi sold for CGT ie will the increased market value of the bungalow once PP has been obtained be a factor in increasing the cost from the actual payments made?
Thanks
Bridget
Bridget