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In 1898, Surrey Council realised that their asylum at Brookwood had exceeded the statutory population limit.  Surrey Council decided to extend the Asylum to the West and construct a new one in the East.  For this they selected Netherne, a farming estate, as the site for a new Mental Hospital to relieve an overcrowding problem  The  estate was purchased for £10,000 and a 960 patient hospital was to be built there, in 1900 the prominent architect G.T. Hine submitted plans for the new buildings, the design reflects the new hospital built in East Sussex, Hellingly.  This was Hines seventeenth asylum, and used the popular Compact Arrow plan. The Foundation stone for the Asylum was laid on the 18th of October 1905 and opened its doors on the 1st April 1909.

Netherne gained a reputation as a pioneering force in the treatment of mental health and in setting standards for the care of patients. Patients enjoyed good food, books, newspapers, indoor and outdoor games and church services at St Luke’s, the on site church. The recreational hall played an important role in maintaining morale with monthly dances, fancy dress parties and a Christmas pantomime in addition to the various sports club activities. During World War 1, Netherne had to handle large numbers of patients from neighbouring hospitals, which had been taken over by the military. Food from the market garden contributed to national supplies and convalescent soldiers and German Pows were bought in to assist due to staff shortages.  After the war, the hospital, inline with many others around the country, was renamed to a Mental Hospital and the Asylum name was dropped.  In 1933, a voluntary admissions hospital was opened to the south of the site, along with seven new villas and two new female wards saw the number of beds increase by 480.

The Second World War also stretched resources with 6 wards and 2 villas being used for air raid casualties, this meant that some beds throughout the hospital were as little as six inches apart. Netherne helped assemble electrical parts for a nearby munitions factory and by the end of the war most patients were employed in sustaining the war effort. Being close to targets such RAF Kenley and a main road/rail link to London, several bombs fell in the grounds including one in the nurse’s home which failed to explode. After the war, in 1948, Eleanor Roosevelt visited the hospital, on returning to the States, she wrote a column in a number of Newspapers stating that the countries hospitals has a lot to learn from Netherne.  The introduction of tranquillisers in the 1950’s caused many changes, including the removal of security fencing. In 1961, following a speech by Enoch Powell calling for mental hospitals to be closed in favour of care in the community and the use of general hospital acute units, Netherne became a joint body with Redhill General Hospital in 1965, and the intake was gradually reduced.

After a steady decline from almost two thousand in the 1950’s, the hospital finally closed in the mid 1990s and the remaining 150 patients were embraced into the local community under a supported care programme. Reigate and anstead Council gave Gleeson Homes permission to develop the site in 1994. The freehold is retained by the NHS, and approval has been given to erect a total of 440 homes in the village. (It is anticipated that this figrure will reach 500 if the Hedgefield site is developed.) The older houses in Netherne Lane, Park Lane and Woodplace Lane were originally part of the hospital and used as staff accommodation.