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Acorn Bank has a long history which dates back to the 13th century. The first owners were the Knights Templars in 1228, from whom the nearby village of Temple Sowerby got its name. After the suppression of the Templars, the manor passed to the Knights of the Hospital of St John, who held it from 1323 until the Dissolution of the monasteries by Henry VIIIth. In 1543 Acorn Bank was acquired by Thomas Dalston, a local landowner, and remained in the hands of his descendants until the 1930s. The name 'Acorn Bank' was given to the property when the Dalston's bought the property. It was so called because of the ancient woodland covering most of it. In the 18th century, John Dalston had much of this woodland felled to create the view of the Lakeland fells in front of the house.

During the late 18th and early 19th centuries it passed through the female line three times, eventually passing to the Boazman family from Newton Aycliffe in County Durham.

Acorn Bank, with its 180 acres of park and woodland was given to the National Trust in 1950 by the writer Dorothy Una Ratcliffe who, with her second husband, had bought the property in 1938. The house was leased to tenants for the next 40 years; the last tenants were the Sue Ryder Foundation, who used it as a nursing home. The gardens were opened to the public, and in the 1990s the estate walks began to be opened up and the restoration of the water mill began.