The land, portion 36, Lett parish, was first granted in 1837 to William Dwyer of Sydney. Dwyer did not build on the land and in 1856 sold it to John Blackman of Rosedale in Hartley Vale (A048). Blackman at once commissioned the local experienced builder/architect Alexander Binning to design an inn. The stone inn and a fine stone stable block were completed between 1856 and 1859 by 19 known local tradesmen, including 3 stonemasons (Maly, Walker and Pearse). Blackman continued to live at Rosedale and leased the new Australian Inn to J A Salmon in 1859. After Blackman's death in 1860, his widow continued to lease the inn to various licensees until 1873, when she moved into the house, naming it Fern Hill. Elizabeth Blackman died in 1901 and her husband's division of his property, including Fernhill, was settled only in 1910. Fernhill was thereafter owned by two sections of the family, Peacocks and Merricks, in dual occupancy, until the Merrick sisters bought the Peacock section in 1952. The National Trust inherited a large share in Fernhill in 1970 and consolidated their holding in 1982. After an unfortunate history under Trust ownership, it was sold to the Merrick family in 1998