Every prime minister has at least one guilty pleasure; Rishi Sunak has several. Colleagues tease him for his taste in music (Michael Bublé), television (Emily in Paris) and literature (Jilly Cooper CBE). One of his favourite novels is Cooper’s first ‘bonkbuster’ Riders, a tale about the great and good – and a Tory minister for sport – frolicking in the fictional Cotswolds county of Rutshire. Infidelity, duplicity and intrigue, all playing out in Conservative heartlands.

Sunak’s problem is that these days places like Rutshire might no longer be Tory safe seats. Formerly true-blue parts of the country may be set to turn yellow. In the local elections, the Liberal Democrats surpassed expectations, winning control in Home Counties councils including Theresa May’s territory of Windsor and Maidenhead, and denying the Tories control of Hertsmere, where Deputy Prime Minister Oliver Dowden is the MP. Over in the Cotswolds, the election of one Lib Dem councillor – Chris Twells – came as a shock even to the candidate: he was already a councillor in Salford and had been listed as a ‘paper candidate’160 miles away, on the grounds his party had no chance of success.

It was these Lib Dem victories – along with gains by independents and the Greens – which meant that the Tories outperformed the worst-case scenario of 1,000 council seat losses set out by the party chairman Greg Hands. (‘What was Greg thinking?’ asks one former cabinet minister of the failure to manage expectations.) The Tory losses allowed Labour to take back the title of the largest party in local government for the first time since 2002.

Labour made most of its gains in the Red Wall, yet the most troubling results for the Conservatives relate to the Blue Wall. ‘Our worst losses were to Liberal Democrats and Greens in the south,’ says a minister. Some Tories look on the bright side and say the rise in support for the Lib Dems and Greens shows that the public are unenthused by Keir Starmer. The national vote-share swing suggests that while Labour had a decent night, the party would fall short of a majority if the results were repeated in a general election. Government aides are taking comfort, too, from the fact that there is little sign of a threat to the right of them – Richard Tice’s Reform party fielded 480 candidates, of whom just six won, while Ukip faced a wipeout.

More pessimistic Conservatives see an effective anti-Tory tactical vote emerging. ‘It’s a real problem,’ says a former cabinet minister. The hope is that tactical voting could prove trickier in a general election when it is clearer if a party is running a paper candidate.

Inside Liberal Democrat headquarters, aides are trying not to get too carried away. Historically, the party tends to do better in local elections. It also soared in the European elections of May 2019 – but then went on to make two significant errors for the December general election. First, the party expanded its list of target seats, thereby spreading thin valuable resources for campaigning. Second, the then leader Jo Swinson declared – ambitiously – that she could be the next prime minister. It didn’t end well. Her party lost seats, including her own.

New measures are in place to try to avoid such mistakes. Activists on the ground have a fast-track channel to the centre to send feedback if a message lands badly on the doorstep (the 2019 election pledge to revoke Article 50 misfired, for example). The plan is to keep campaigning on three key areas: cost of living, river pollution and the state of the NHS. Constituencies such as May’s seat of Maidenhead – a Tory majority of 18,846 – are viewed as surmountable in a couple of elections’ time.

In the meantime, the Lib Dems have high hopes for the new seat of South Cotswolds, created by the boundary changes. They aim to oust Dominic Raab in Esher and Walton, Jeremy Hunt in South West Surrey and – on a very good night – even fancy liberating Michael Gove back into the private sector by taking Surrey Heath, where they now run the council. ‘He could be the new Michael Portillo,’ says one hopeful Liberal Democrat.

It’s Tory MPs in seats where the Lib Dems are a threat who tend to be most worried about new housing being built. Fear of the Lib Dems was also instrumental in getting Sunak to ditch mandatory housing targets. Gove has spoken of the need for housing to be aesthetically pleasing. He is now trying hard to cook up an offer for renters – who are seen as key to the party’s appeal in the south-east – in the coming King’s Speech, along with a crackdown on leaseholds: an issue with resonance in the Blue Wall. A new Opinium poll for Commonhold now finds 60 per cent of Conservative 2019 voters support abolishing leaseholds. It is unlikely the government will move to abolish leasehold ahead of the election but Gove may stop new ones being sold, as well as capping ground rents. This is a knotty issue, but one of increasing importance as homeowners find themselves trapped in a system that gives them little say.

Since the Lib Dems’ successes last week, Starmer has been repeatedly asked whether he would rule out a coalition with them – or with the SNP. He rejects any deal with the latter, but won’t rule out the former. This raises the question of what the Lib Dems would demand as the price of coalition. Press regulation? (Ed Davey’s deputy, Daisy Cooper, worked for Hacked Off.) Would Starmer move to a proportional representation voting system if that was the demand?

Neither the Lib Dems nor Labour want to get dragged into questions about coalition, for fear of complacency and of diluting their own party messages. Starmer says he’s going for a majority. Davey rules out a deal with the Tories, but stays silent on the subject of Labour. The bookmakers still say a Labour majority is overwhelmingly likely – an 88 per cent chance – but it’s been quite a few years since the betting markets called anything right in British politics. The extent of the Lib Dem comeback in leafy Tory territory may well decide the fate of both parties.