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The name of this elegant and trendy area originates from the 18th century. Local entrepreneurs and industrialists transformed the Lace Market from a popular residential area to a commercial hub.

The thriving local industry was dependent on two key inventions. In 1589 William Lee, a local inventor, developed a framework knitting machine which enabled high volumes of lace to be manufactured. By 1808 entrepreneur John Heathcoate had further developed this into a hand operated machine and the machine lace industry was born. With the introduction of steam power in the 1800s the production of Chantilly and other luxury weaves brought an economic boom to the district. Over 130 factories were based in the Lace Market along with a population of 50,000.

Dating back to the late 1700s the Lace Market Hotel comprising two listed Georgian buildings were originally elegant residences. The houses became a mill for the manufacturing of lace fabrics during the Victorian era and latterly in the 19th Century became a doctor's surgery, former Probation Office and even a school.

Lace Market Hotel opened its doors in 1999 as one of the first boutique hotels outside London.