War damage and post-war recovery
The outbreak of the Second World War brought a halt to building. Extensive damage was caused to many of Peabody's estates as a result of enemy raids on London. This occurred from the start of the Blitz in September 1940 to the V1 and V2 raids in the last years of the war. Two hundred tenants and three members of staff were killed, with the greatest loss of life being at the Whitechapel Estate on 8 September 1940 when nearly 80 people died. Altogether 110 of Peabody's blocks and 35 cottages were either completely destroyed or severely damaged. This left a huge recovery programme to be tackled afterwards.
The Peabody Donation Fund Act, a private Act of Parliament, was passed in 1948. Its purpose was partly to give Peabody the extensive powers it needed to complete its post-war recovery programme. The Act also extended Peabody's area of operations to a radius of 25 miles from the Royal Exchange.
The worst of the war-damaged blocks were either replaced by totally new blocks, or cleared altogether to reduce the density of the dwellings on some of the more crowded estates. Blocks that had suffered less severe damage were repaired according to the original design.
The Cleverly estate suffered extensive bomb damage.
In a pioneering scheme, the Roscoe Street estate north of the Barbican, which had been particularly badly damaged, was completely cleared and additional land was acquired to extend the site. In the mid 1950s redevelopment began on an entirely different layout, which included two 13-storey tower blocks. They were the first blocks of that height in London which the planning authorities allowed to be constructed with a single staircase.
At the same time a modernisation programme was launched to convert all the oldest estates to meet current standards, abolishing the shared facilities and making each flat self-contained. This was achieved by amalgamating some of the smaller flats so that there was an overall reduction in the number of dwellings in every block. New housing legislation enabled much of this work to be grant-funded rather than having to be paid for from Peabody's own reserves.