In 1972, Claremont Hospital was divided into Graylands Hospital and Swanbourne Hospital. Whitby Falls became an annexe to Graylands and was de-gazetted from an approved hospital to a hostel. The Armadale Health Service supplied psychiatric and allied health services to the hostel from the 1980's.

In 2004, the hostel was due for closure and a collection of records from Whitby Falls were transferred to the State Records Office. Ongoing patient-based files were due for transfer to the Armadale Health Service.