The estate was built by the Greater London Council and completed in 1967 to a design by architects Farber & Bartholomew. Although flats are relatively large, the estate became run down, neglected and plagued by anti-social behaviour. The redevelopment of nearby Kings Cross probably contributed to a growing drugs and prostitution problem in and around the estate as activity was displaced from Kings Cross. A multimillion-pound UK Government and Islington London Borough Council investment in the 1990s failed to stop the decline. Walkways connecting the blocks were mainly removed, gardens created for most ground floor flats, and closed-circuit television cameras linked to a concierge in an onsite office installed. The concierge's office was burnt out and the CCTV system vandalised. It was not replaced. Hyde Northside were given the management of the estate in 2001. Following the death of a young boy on the estate, Christopher Pullen, when a security door fell on him, residents set up the Market Estate Tenants and Residents Association, demanding that the estate's fundamental problems be resolved. Following several years of discussions, it was agreed that the estate needed complete redevelopment. Islington Council decided that the only way of bringing in the necessary funding to do this would be to invite a housing association to take the estate over in a stock transfer. Hyde Northside failed to be selected by the residents and Southern Housing Group was chosen from a short list by METRA representatives in 2003. After nearly 18 months of further discussions between residents, Islington Council, the office for the deputy prime minister, Southern Housing Group and their masterplan architects, Watkins Gray International, over 80% of the secure tenants on the estate voted on whether to transfer the estate and their tenancies to Southern Housing Group, with over 85% voting in favour. Under the agreement the whole estate was demolished and replaced by a mixture of houses and small blocks of modern low rise flats, built on a traditional street pattern to Watkins Gray International's masterplan. The contractor on this project was Higgins Construction. Existing secure tenants were guaranteed a new home on the new development if they wanted it, and 90 additional homes for sale and shared ownership will also be built to help cross-subsidise the costs of building tenants' new homes. Caledonian Park was scheduled for improvement as part of the scheme. Work on the new homes started in early 2005, significant improvements were made to Caledonian Park beginning in 2006 including planting new trees and redoing all the paths. The last remaining residents moved out of the old estate blocks in February 2010.
Following the closure of the old blocks, the Market Estate Project invited 75 artists, designers and the residents of the estate, to work together in flats left behind, corridors, staircases and building facades. Work was developed over a number of months, culminating in a one-day event on 6 March 2010 which invited the public to explore the art works created on site, just before the demolition bulldozers moved in. The project was developed as a partnership between Southern Housing Group and TallTales, a London-based art practice which focuses on working with artists in areas undergoing development. An estimated 2500 people attended the day, which was described by British artist Anthony Gormley as a "joy and delight".
