Just a few months ago, a home in the Cotswolds was among the most sought-after purchases for middle-class buyers.The idea of leaving city life behind for rolling hills, Wellington boots and picture-postcard villages in one of England’s most desirable counties drew buyers in large numbers.But that momentum now appears to be fading, with signs the Cotswolds property market is cooling.House prices have fallen 12 per cent from their post-pandemic peak, according to Savills, while research from estate agency Knight Frank shows farmhouse values down 7.3 per cent.The counties hit the hardest are Gloucestershire and Oxfordshire, the Times reported.It reported that 27 per cent of properties listed on Rightmove for £2 million or more have seen at least one price reduction. Indeed, one resident told the Daily Mail: 'I had heard that it's very much a buyer's market at the moment.'There are a few properties in our village in the North Cotswolds that have been on the market for months - whereas they usually go quite quickly.' Is the housing market in the Cotswolds on the decline? Experts weigh inSo, what is actually going on?Alex Greaves, managing director of Ridgestone Property, a luxury property buying agency, told the Daily Mail: 'I wouldn’t describe the Cotswolds housing boom as over, but the market has undoubtedly softened from the highs of recent years. 'Like much of the prime country-house market, price growth has paused, buyers are more considered, and we are increasingly seeing asking prices adjusted and wider discounts negotiated.'We are not seeing evidence of prices rising in the Cotswolds. On the contrary, the market is offering noticeably better value than it has in recent years, particularly for committed buyers who are well advised. 'We recently agreed terms on a prime family home in the central Cotswolds for American clients and were able to negotiate a double-digit percentage discount - a result that would have been very unlikely during the peak of the market.'Why is this? Alex adds: 'There is no single reason for the shift; it is more of a perfect storm. Higher interest rates, global geopolitical uncertainty and very high house prices have all contributed to the market reaching a natural ceiling. Alex Greaves, managing director of Ridgestone Property, has shed light on the situation'At the same time, the return to office-based working has reduced the appeal of moving as far out of London as many buyers were prepared to go during and immediately after Covid. 'Many of our clients are now preferring to explore opportunities within London itself, or in the neighbouring Home Counties such as Surrey or Berkshire, where they can still achieve more space and greenery without being quite so far removed from the capital’. According to Rightmove, house prices in the Cotswolds have an overall average of £450,747 over the last year.The majority of properties sold in the Cotswolds during the last year were detached properties, selling for an average price of £663,872. Semi-detached properties sold for an average of £400,774, with terraced properties fetching £366,380.Overall, the historical sold prices in Cotswolds over the last year were similar to the previous year and 1 per cent down on the 2023 peak of £457,395.The Cotswolds has evolved from a sleepy enclave filled with farmers, writers and countryside types to a veritable celebrity haven.Famous residents include Jeremy Clarkson, where he has his Diddly Squat Farm, as well as David and Victoria Beckham, supermodel Kate Moss and Oasis star Liam Gallagher. Jeremy Clarkson's Diddly Squat farm has lured in tourists to the regionLuxury hotspots such as Daylesford Organic and the trendy Soho Farmhouse a few minutes' drive away - alongside the global success of Clarkson's Farm - originally fuelled soaring property prices across West Oxfordshire. But with such celebrity comes a real downside. The problem is, it's not just the rich and famous heading there - parts of the Cotswolds have fallen victim to mass tourism, becoming an expensive place to visit and no longer a charming, coveted part of the UK. Last year, parts of the region even started to introduce charges to combat crowds.Bourton-on-the-Water, often dubbed the 'Venice of the Cotswolds' for the river that flows through its centre, introduced new parking charges for tourists to allow residents access to parking spaces in the morning - and then charge visitors coming for the day later on.Bourton-on-the-Water has just 4,000 residents - a number far outweighed by the number of tourists who visit the town each year, estimated to be around 300,000.New measures aim to make parking more challenging for day visitors, hoping to combat the mass overtourism affecting the region.Cotswolds resident and Daily Mail columnist Nadine Dorries even wrote earlier this week: 'But now a serpent has entered our paradise in the shape of the cost-of-living crisis. A friend who told me she wouldn't sell her property for anything less than £3 million, eventually found a buyer who offered a figure beginning with a one. Picturesque villages such as Bourton-on-the-Water have been overrun by tourists'A property that was sold unseen during the Covid pandemic has just gone back on the market for half the price it was bought for – and that's despite undergoing a six-month programme of renovations.'She's not alone.Simon Mills wrote in the Times that 'perhaps the Disneyfication of the area is finally putting people off' - and added: 'So, in real world terms, Cotswold prices are not in a free-falling perfect storm, they've merely dropped from a high of 'completely ludicrous' to a new low of 'totally unreasonable'.'Expert Alex added: 'Some local homeowners have clearly benefited from the pricing boom and the increase in the value of their own homes. 'However, that has also come with concerns around busier roads, pressure on schools, pubs and restaurants, and the wider fanfare that the Cotswolds has attracted in recent years. Significant price growth can also make it harder for local families to upsize, or for their children to get onto the property ladder locally, so the impact has been mixed.' Dozens of high-end properties listed across the Cotswolds have also had their prices cut in recent months as sellers struggle to find a buyer amid the economic uncertainty. There is some hope, though.Craig Fuller, Founder of Craig Fuller Property, says: 'The frenetic post-pandemic boom has undoubtedly eased, but I would not describe the Cotswolds market as being over. What we are seeing is a correction rather than a collapse.'Over the past 12 months we have seen some significant price adjustments, particularly in the £2 million to £3.5 million bracket, where certain properties had become overvalued during the height of the market. In many cases, those reductions were inevitable and reflect a return to more sustainable pricing levels.'Importantly, demand has not disappeared. We continue to see a steady flow of buyers, both from the UK and overseas. 'The Cotswolds continues to offer something that is increasingly difficult to find elsewhere with beautiful countryside, excellent schooling, strong transport links and rural villages that remain largely unchanged. For that reason, we are still seeing a reliable stream of buyers purchasing both primary and second homes.'From a buyer's perspective, this is arguably the best market we have seen for several years. There is more choice, pricing is becoming more realistic and buyers are once again able to negotiate, which simply was not possible during the height of the boom.'Olly Cavner, operations director at Essential Living, concluded: 'The Cotswolds remain one of the most desirable places to live in the UK.'What the future holds, however, remains to be seen.