Hotspot: Grantham, Lincolnshire

Grantham has finally achieved desirable status for the upwardly mobile.

Expect the exceptional from Grantham. Sir Isaac Newton, born in nearby Woolsthorpe Manor in 1642, was educated at King's School in Grantham. South Lincolnshire's largest town also figures in the lives of two British first ladies: Margaret Hilda Thatcher (nee Roberts) was born here in 1925, and around this time, Edith Smith, Britain's first lady constable, was plodding the pavement. Constable Smith's list of achievements include cautioning 150 wayward girls and prostitutes; arresting 15 drunken women; handling 15 female larceny cases and garnering a long string of convictions. Smith specialised in female malefactors.

"Grantham has a wonderful location, close to Peterborough and Nottingham, and with its own good local economy," says Martin Hawksby of William H Brown estate agents. "Demand has started to pick up in the last three years, and only in the last 12 months has it started to push prices up. Prices have risen 25 per cent in the last year in the hottest pockets. Demand is outstripping supply because people realise how affordable buying a property is. First-timers can still afford Grantham."

Peter Mills of Humberts confirms the attractiveness of the town to the property-rich set: "Last year 72 per cent of our buyers came from outside a 50-mile radius. Many of these buyers cashed in on escalating prices in the Home Counties. We recently sold a four-bed farmhouse with stabling and paddocks to a buyer who financed the purchase by selling a one-bed flat in London."

Grantham appeals, adds Mr Mills, to managers who work frequently from home. "Kings Cross in London is only 63 minutes, which compares favourably with many areas in Kent. Properties with barns or other structures which can be used as an office are selling well. Nottingham and Leicester are strong commercial areas, and many people who work in those cities consider Grantham as a base because properties are cheaper. Many families from Nottingham want to be just over the border for the schools."

The full-time or occasional homeworker is sharply influencing the approach of local builder Homes by Marshall. "We are building many cottages with an extra-large landing area with power and phone lines which can be dedicated to a desk and work area without having to give up a bedroom," says director Andrew Pick. "I constantly encounter homebuyers who spend hundreds of thousands of pounds on homes that are not quite what they wanted. Lately we get many people who ask for three or four bedrooms but really want an extra room for an office.'

Although local to Lincolnshire, Mr Pick notes that "as recently as three years ago we would not have built in Grantham because it would have been extremely difficult to build quality homes and make a profit. But with the phenomenal growth in the south east, buyers are starting to look in peripheral areas. Grantham has been having a huge boom for the last 18 to 24 months."

Mr Mills anticipates more of the same: "Only last autumn did we catch up to prices of the late 1980s. We saw a ripple effect then as price rises from the south eventually reached us, and it seems logical that plenty of growth is still to come now."

The Low Down

Transport: The A1 skirts Grantham in a motorway-free zone. Peterborough, Lincoln and Nottingham are all within a half-hour drive, and King's Cross is one hour by train. East Midlands Airport is 35 miles to the west.

Prices: Flats are scarce, and barely cheaper than houses. Two and three-bed terraces and semis cost from £30,000. For properties pricier than £200,000, demand vastly outstrips supply.

Property prices: Humberts has a Victorian farmhouse, Heathcote House, the erstwhile village inn in Ingoldsby (8 miles from Grantham), with barn, workshop and stables for £265,000. Sunnyside in West Willoughby (seven miles) is a country home on 3.5 acres with a large pond and paddock (£245,000). Other properties in this price range include a derelict farmhouse with barn, and a large, modern, detached home with swimming pool.

New homes: Homes by Marshall has five three and four-bed homes in Great Gonerby, two miles from Grantham (£129,950 to £214,950). Buyers who reserve early can have a say on kitchen design, internal fittings and the location of power points and radiators. Another local builder, Jelson, is selling three-bed semis and detached, and four-bed detached homes, at the Fairways in Grantham (£62,950 to £132,950).

The area: Grantham (population 38,000) is the largest town in south-west Lincolnshire, an area of fens, woodland, stone villages and historic market towns. At 282 feet, the medieval St Wulfram's church spire is among the highest in the UK, while The Angel and Royal Hotel may be England's oldest inn. Nearby independent schools include Stamford, Oakham, Uppingham and Worksop and many preparatory schools. The state schools here - especially King's School (boys) and Kesteven Girl's Grammar - are very highly regarded.

Castles and stately homes: The numerous piles include Grantham House, Belton House (three miles) and Belvoir Castle (seven miles), seat of the Duke of Rutland.

Said by whom: According to a South Kesteven District brochure, Woolsthorpe Manor's garden features an apple tree said to be grafted from the original, blown down in 1820, from which an apple fell inspiring Newton's theories on the Laws of Gravity.'

Contacts: Homes by Marshall, 01476 571870; Humberts, 01476 576133; William H Brown 01476 566363 and Jelson, 01476 593651.