Property: They're queuing up on the Cotswold way

Anyone thinking of moving west, particularly from London, should expect to join a long tailback of house buyers on all routes to Gloucestershire, Oxfordshire and the Cotswolds.

The buyers are, in the main, families with children, or couples who are thinking of retirement. For the first group, good schools are the top priority; for both groups, access to a fast train to London is crucial.

David Fenton, of Hurley Lloyd Thorpe in Stow-on-the-Wold, Gloucestershire, says the market began to pick up considerably in January. 'We have had quite a lot of the Fulham and Chiswick people, who have sold terrace houses in London - usually for around the pounds 180,000 mark. They can buy something rather nice out here.' He has just sold a four-bedroom house in the village of Broadwell to one such buyer.

As you move upmarket the competition gets hotter. Clare Hunt, of Butler Sherborn in Burford, Oxfordshire, says there is a large number of buyers in the pounds 250,000-350,000 category but a shortage of property. In that price bracket, buyers are likely to be looking at farmhouses and small rectories. Hurley Lloyd Thorpe is selling a pretty, Grade II listed house in Syreford, near Andoversford, with seven bedrooms and three receptions, for pounds 295,000.

But it is at the pounds 500,000 level that the market is moving fastest. There has been such competition for large country houses that a few have gone over the asking price. The Old Rectory in Hinton Waldrist, a substantial house sitting next to a 13th- century parish church, went for well in excess of its pounds 650,000 price tag. Butler Sherborn also sold Finial House in Broadwell for more than its pounds 585,000 asking price.

Kemble Mill, five miles from Cirencester, priced at pounds 750,000, sold to a London buyer with London competition. Butler Sherborn expects a similar level of interest in the Manor at Hannington Wick, a Jacobean house approached down a private drive and over a small bridge. Asking price for the house, which has seven bedrooms, four bathrooms and four reception rooms, is pounds 540,000. The Dragon School and Cothill Prep nearby are two of the main attractions for buyers with young children.

'There must be an awful lot of houses changing hands in London for around the pounds 500,000 mark,' says Mr Fenton. 'The buyers we see are predominantly cash buyers. They all want classic Cotswold property, in a village or in a few acres of land.'

In Castle Cary, Somerset, Sue Bradley Hudson, of Bradley Hudson, says anything over pounds 250,000 is attracting a great deal of interest. In Cheltenham, Tracey Richards, who runs Black Horse Agencies, had three buyers chasing a pounds 275,000 mill and sold it in 10 days. Even in the town, he says business is good, with tax increases appearing to have no effect.

Just beyond this prosperous triangle, however, the market has been sluggish since the middle of May. In Wiltshire and the parts of Somerset that lack a Cotswold cachet, houses are proving difficult to sell and prices are slipping.

In Chippenham, two-bedroom terrace houses that were going for pounds 39,000 or pounds 40,000 at Christmas were fetching pounds 41,000 or pounds 42,000 in April. Now they are back at their Christmas levels.

Jo Williams, area manager for Black Horse, says his company's offices in stone-cottage country, such as Bradford- on-Avon and Malmesbury, are doing well, but those selling bread-and-butter estate houses and town houses have seen business drop off this summer. 'The threat of redundancy, which seemed to ease at the beginning of the year, has come back,' he says. 'The tax increases seem to have hit first-time buyers and young families harder than expected.'

The Cotswold market is a microcosm of the house market in general. Modern estate houses and regular suburban semis and terrace houses are struggling to hold their value, while pretty, period property at all price levels is popular. The most common description of the market is 'patchy'. How much so depends on which patch you are cultivating.