While Sir Joseph Bailey was rebuilding the Cheese Market, great changes were happening. In 1837 the workhouse was built near St Mary’s Church and the National School set up next door.
From 1849 pauper children were accepted there instead of going to the workhouse which today are the flats at Union Mews. In 1864 the Kington to Brecon horse-drawn tram was replaced by the Hereford- Hay-Brecon railway, which offered easier transport but had a detrimental effect on the local economy.
Plentiful manufactured goods from the cities forced the closure of several small family businesses, cheap leather goods meant the tannery was no longer viable and allied trades such as saddle-making declined. River trade was intermittent and after 1900 commercial flour production and beer-brewing in Hay ended.