Residents have started saying their goodbyes to the Victorian factory that has dominated views of Jericho for nearly two centuries.

Demolition work on W Lucy's Eagle Ironworks, in Walton Well Road in Oxford, is well underway as part of a development to build 185 flats. Lucy's sold the canalside site in September to Berkeley Homes, after plans to use the factory facade were dropped.

The foundry was built in 1825 with many workers living in properties owened by Lucy's in Jericho. Over the years the company has moved from iron into property management.

City councillor Susanna Pressel said the demolition would change the face of that corner of Jericho, especially the cemetery next door which she said had had a very Victorian feel. She added: "People are in for a big shock. It was a very very special place, but it will suddenly be opened up and it will be completely different."

Luther Triggs, 21, grew up in the area and now owns Peppers Burgers on Walton Street. He said he had mixed feelings about the factory being knocked down: "I used to love it as a kid, but now I own a business so I think that more houses will be good for me. But I am sad to see it go, it brings back a lot of memories."

Berkeley Homes hope to have completed the demolition by February. The new homes are expected to be complete in 2008.