Poet Kit Fan grew up near one of the last shanty towns of Hong Kong - Diamond Hill, once dubbed the "Hollywood of the Orient" and frequented by the likes of film star Bruce Lee.

During his childhood, in the wake of the 1984 Sino-British Joint Declaration, the neighbourhood was a drug-ridden shambles. And then it began to vanish.

"I remember, as a child, seeing the town gradually disappearing," recalls Fan, 41. "And then I saw the bulldozers coming through."

It was not something he dwelt on much as a child.

But after he moved to Britain when he was 21, the memory of Diamond Hill haunted him.

Little trace of the town remains today.

But in his debut novel Diamond Hill, Fan resurrects the neighbourhood as it would have looked in 1987, a decade before Britain's handover of Hong Kong to China - a precarious maze of shacks and open gutters, shaken constantly by the rumblings of the planes flying close overhead from nearby Kai Tak Airport.

As a child, Fan visited the area with his grandparents.

"It was pretty rough," he says over Zoom from his home in York in north-east England. "But though people were living in poverty, they were extremely enterprising.

"I wondered what happened to all the people living there, even though it must have been a very undesirable place to live - to have your home totally destroyed just because a piece of land needs to be developed."

Diamond Hill is narrated by Buddha, a recovering drug addict-turned-monk who has been sent to live in a nunnery loosely based on the renowned Chi Lin Nunnery, one of the area's landmarks today.

He crosses paths with various women, including the nunnery's redoubtable leader, the Iron Nun, and her enigmatic acolyte Quartz; a violent teenage gang leader dubbed Boss; and a faded aspiring actress who calls herself Audrey Hepburn.

Diamond Hill was the site of film studios like Golden Harvest, which helped launch Lee's career.

"The studios made the shanty town almost like a film set," says Fan. "I think the characters in the novel are always acting, whether they're consciously doing so or not."

Fan - whose poetry collections include Paper Scissors Stone (2011), which won the inaugural International Hong Kong University Poetry Prize, and As Slow As Possible (2018) - makes liberal use of Cantonese profanity in his novel.

"You will notice people using foul language quite creatively in the streets of Hong Kong and I thought I should capture that," he says.

He is also concerned that Cantonese is losing ground in Hong Kong as younger speakers "mainlandise", or tend towards Mandarin.

His younger sister and parents - his father is a taxi driver and his mother has worked as a factory production manager, a cleaner and a tutor - still live in Hong Kong.

He began writing Diamond Hill in 2016 and finished it in 2019 amid the wave of protests in Hong Kong.

"It was uncanny," he says. "I set out to write a novel about 1987, but it feels like I am writing about now. It really feels like history has repeated itself and this second repetition is a nightmare."

The gang leader Boss spends the novel plotting to escape Diamond Hill for Britain, alluding with foreboding to what she calls "the death of Hong Kong".

"I feel like the joint declaration was a bit of a time capsule," says Fan.

"They promised that Hong Kong would remain unchanged for 50 years. But as we know, everything changes. We have been sold an experiment, but we know that experiment could go many ways."

•Diamond Hill ($27.95) is available at Books Kinokuniya.