By 1879 the Herne Bay, Hampton and Reculver Oyster Fishery Company had been forced to go into liquidation. The tramway was removed a year later, and the pier started to fall into ruin. Much of the company's land was bought by Thomas Kyffin Freeman, who had formed another idea for making money out of the area. He set up the Hampton-on-Sea Estate Association Ltd with the aim of creating a seaside residential estate.

Freeman intended to build new housing at Hampton-on-Sea, but first he concentrated on installing facilities for sport and leisure. A set of six grass tennis courts, a miniature golf course, and an archery were created, a bandstand was erected, and foundations were laid for reading rooms. The twelve houses in Hampton Terrace were redecorated, but before any new house building could begin Freeman suffered a stroke and died.

After Freeman's death the estate was bought by the Land Company of 68 Cheapside, London. The  Land Company laid out a grid of roads with Hampton Grand Parade and the Royal Parade along the sea front and six parallel streets running from north to south. There were plans for a church, shops, a tavern, a hotel, and recreation areas. A drain was installed, and although the estate was not connected to the main water supply it was claimed that there was excellent spring water.

The first auction of house and shop plots was held on 17 September 1888. Advertisements were placed in the local newspaper, the Herne Bay Press, which announced that a special train would leave London on the morning of the auction, with return tickets at a nominal fare, and lunch would be provided.

In the same issue of the  Herne Bay Press there was also a long article, presumably written in collaboration with the Land Company, proclaiming the attractions of Hampton-on-Sea. Its proximity to London was emphasised, and it is true that if you caught the fast train from Herne Bay at 8.39 am you could expect to arrive in Victoria by 10.12. Property on the estate would appeal to “capitalists” as it would be possible to build small houses and let them at “enormous rents”. Botanists and entomologists would find much to interest them. Bathing would be excellent, with the unusual but eventually highly significant advantage that you could soon get into deep water without having to traverse a wide extent of sand. The article included a long list of the types of fish that could be caught and another list of the species of birds that could be killed by shooting.

A similar article, slightly amended, was published again in the Herne Bay Press on 13 October 1888. That version of the article is reproduced in full in Martin Easdown’s book.

In one respect the article can be regarded as grossly fraudulent. It mentioned the pier at Hampton, and stated that since it had been erected the sand and beach had accumulated a good deal. It is true that the pier had started to have a marked influence on the coastline, but it was not in the wholly positive manner implied by the article. East of the pier, in front of the town of Herne Bay, there had indeed been an increase in the volume of shingle, but on the west side of the pier a net loss of shingle had occurred and the land was being rapidly eroded.

The coast of north Kent from Sheerness to Herne Bay has been prone to erosion for many centuries. The land is composed of a soft clay known as London clay, and there are no sedimentary rocks to give protection against the sea. Average rates of cliff erosion range from one to five metres per year. In 1769, for example, Warden church on the Isle of Sheppey lay 400 metres from the coast, but it was lost to the sea in 1898.

At Hampton erosion was occurring earlier in the nineteenth century. In May 1836 the Kentish Gazette reported that the sea was making rapid encroachments on the coast between Herne Bay and Whitstable. In some parts the pathway along the cliff top, which had been 3 to 4 yards wide, had disappeared. Beans were growing within two inches of the cliff although they had been sown sufficiently far from the edge to allow the plough to be turned between them and the precipice.

The rate of erosion at Hampton was accelerated by the pier constructed by the oyster company. Shingle tended to move in a westerly direction in front of Hampton and Herne Bay. The pier caused an increase in shingle along the Herne Bay beach, but at Hampton shingle tended to be moved by tidal currents and was not fully replaced. The land itself was left unprotected and was eroded rapidly during high tides, especially when the wind blew strongly from the north east.

It is not clear when the original rough dwellings at Hampton disappeared, but by the time the Land Company arrived their location must have been under the sea.

After the first auction of plots in September 1888 the Land Company held a second auction about a month later. Throughout 1889 the sale of plots was advertised in the Herne Bay Press. Then in July 1890 two further auctions were arranged. Further advertisements appeared in 1891.

Newspaper reports after each auction appear to indicate that all auctioned plots were sold.  Even if that was true very few of the plots were ever developed. A terrace of four villas was erected in Eddington Gardens. The terrace of 12 houses built by the oyster company, now in a street called Hernecliff Gardens, was extended by the addition of three new houses on the seaward side, but as six of the existing houses were amalgamated into three the total number remained the same. A single house named Pleasant Cottage was built in Swalecliffe Avenue. The 1898 Ordnance Survey map shows a Mission Room at the south east corner of the estate, but no shops or hotel were built.

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