Coming up on the inside

Cheltenham - a mild-mannered, wellbred Regency town at the edge of the Cotswolds - allows itself a little temperature rise in March; this is when racegoers swarm in for the Gold Cup, high point of the National Hunt season and this year brazenly billed as "an unmissable date with destiny".

All eyes will be on trainer Henrietta Knight's horse Best Mate, which, if it equals Arkle's record of a third successive Gold Cup triumph, will enter the record books as the greatest steeplechaser of its generation.

The three-day Cheltenham racing festival runs from Tuesday 16 to Thursday 18 March, and is a firm favourite with the Irish racegoing fraternity who bring a yearly dose of Gaelic craic to this graceful spa town; even Cheltonians describe the atmosphere as electric and exciting.

The restaurants will have been booked up months in advance, the pubs, bars and clubs full of racegoers celebrating their wins or drowning their sorrows and, with a shortage of accommodation in the town, Cheltenham's home-owners know they can clear as much as £60 a night per person by opening up their spare rooms.

Architecture enthusiasts adore this almost perfectly proportioned town, which, over the years, has sometimes taken itself a little too seriously, earning a music-hall reputation for genteel stuffiness, no doubt never fully discouraged by the once straight-laced Cheltenham Ladies' College.

In fact, says Susan Healey, from estate agent Hamptons, Cheltenham is nothing like the retirement capital of the Cotswolds that some believe. It may be less well known and touristy than Bath, but it is more accessible to Londoners than, say, Buxton or Harrogate.

"Most of the people who move here are families looking for good schools, such as the Ladies' College; or coeducational Cheltenham College or Dean Close," she says.

"A lot of people moving from London want to move to the country and may start by renting or buying a country house. Then they find the twice-daily school run into Cheltenham takes too long, and so end up moving into the town so their children can walk."

Until the discovery of its therapeutic waters in the 18th century, Cheltenham was a quiet market town dwarfed by the much larger city of Gloucester six miles to the west. The town grew in popularity after King George III spent five weeks at Cheltenham in 1788. Between 1700 and 1850, the population of the town grew from 1,500 to more than 35,000, making it the largest town in Gloucestershire.

Competing spas opened during the town's heyday (from 1790 to 1840), leading to a building boom that has left it with beautiful Regency terraces, squares and grand villas.

Even today, Cheltenham's best addresses are found in districts such as Pittville and Montpellier, developed by rival spa entrepreneurs. According to Healey, the areas to aim for are those in the GL50 postcode district, which also includes Christchurch, Lansdown and Tivoli. The price of a town house there starts at about £500,000, but can top £1 million. A grand Regency house will set you back between £700,000 and £1.5 million.

Many of these houses have been converted into flats; a two-bedroom version starts at £200,000, but can rise to £500,000 if it is in The Broadwalk, a new Regency-style terrace with underground parking and all mod cons. However, there are plenty of Regency houses at lower prices elsewhere in the town, with three to four bedrooms and plenty of original features costing you about £375,000. First-time buyers can pick up a one-bedroom flat in the town for less than £150,000.