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The London Diocesan Penitentiary was formed after a gift of money to the Rev George Nugee in 1853, for the establishment of a house for the "reception and reformation of penitent fallen women". The sum involved was inadequate for the purpose and a public appeal for donations and subscriptions was made. A Council was appointed under the presidency of the Bishop of London on 20 March 1854, and an executive committee was formed.
Temporary accommodation was found at Hampton Court and then at Sunbury in 1855, but by the end of that year the lease had been acquired on Park House, Highgate. This property and adjoining land was subsequently purchased for £11,500 in 1861 and a mortgage raised to meet the cost; much of the adjoining land was later leased or sold for building and the money obtained used to assist paying off the mortgage.
The later history of the institution is uncertain, although in 1900 it was taken over by the Clewer sisters (an Anglican female religious community based in Clewer, Berkshire), and, at an unknown date, it became known as the House of Mercy. It was closed in 1940.