At this time, the area of Lækjargata was part of the marshy Austurvöllur, a field belonging to the farmers of Vík.
[1] Lækjargata began to take its present form in the late eighteenth century, when two houses were built there.
Einar Valdason built a turf farmhouse to the south-east of the cathedral, first called Kirkjuból ('church dwelling') and later Lækjarkot ('stream cottage').
[2] Lækjargata was in those days called Heilagsandastræti ('Holy Spirit street'), because one of the houses was inhabited by Bishop Helgi Thordersen and the other by the cathedral priest, Ólafur Pálsson.
As the population of Reykjavík grew, the street was extended on the south side of the stream all the way to Tjörnin.