For some books setting is everything - the story couldn’t exist anywhere else. For others it doesn’t really matter.
The first question is whether to make it up, or keep it real. Writers often set books in their home town/city, or in places they've visited. But equally there are many books set in places the author has never been. With the internet, libraries, and perhaps having friends in far-flung places, there are many ways of carrying out research about an area.
Driftwood is set in Auckland, Sydney, and an unnamed area at the top of the South Island of New Zealand. You won’t be surprised to find out that I live in Auckland, and have visited both the other locations. Driftwood is an example of a book that could have been set in any city.
In my mind I know exactly where in Auckland Juliet lives, though I don't mention it in the book. I based the coastal area setting on a real place, but I didn’t name the area because I wanted the freedom to change the topography to suit the story.
Lives Interrupted is set in London, and because it touches on real events I wanted to set it in that city.
The setting will also have a great impact on the type of characters living there. Someone who has grown up in a city will have had different experiences, and therefore a different outlook on life and their surroundings, than someone born and raised in a rural setting.
I have a first draft of another novel, as yet unnamed, involving three siblings. The settings are a Cornish village (Poldrayth), Bristol, and London. Each is home to one of the siblings, though all grew up in Poldrayth. The settings reflect the different characteristics of each, and how they think of the others.
I enjoy developing the settings for my writing, and to me, it is as important as developing the characters. Poldrayth is based on a real village, but again, as I wanted to play around with the geography of the area, I fictionalised it and created a new name.
Using real settings is helpful as the reader will already have some knowledge of the place and you don’t have to give a lot of background information. If I mention London you don’t have to have lived there to conjure up pictures of things you’ve seen or read about it. Busy. Crowded. Traffic. Underground. Red double-decker buses. Ancient buildings. Tradition.
Even if you are using a real place you can still blend fact with fiction, and change the geography a little by adding other buildings, streets, or parks. In Lives Interrupted Kate lives in Wood Green. I knew some of the area, and also used online maps, but I had already decided on the type of house they were renting, and created the park and shops where Kate met Francine.
One thing we have no control over is how our readers will react to a place. Some people may think living in London is a dream come true, but to others it might be the stuff of nightmares.
We're never going to be able to please everyone. Ultimately we can only make sure the setting we choose is true to the story we want to tell, and to the characters who inhabit it.