The story is set in Cornwall, a territory that juts out like a leg from the southwest of England, forming a peninsula. The story's author, Du Maurier, lived in Cornwall, and her work is strongly associated with that region.
Cornwall, being surrounded by the Atlantic on three sides, has many miles of coast, which is reflected in the story's many references to the sea. For instance, Nat "could hear the sea roaring in the bay." Cornwall is not a heavily populated region, which is reflected in the isolated feeling of the story.
The Birds was written in 1952, at a time when England was still recovering from World War II. Council houses, mentioned four times, are government built homes, made to be affordable for people without much money. Nat refers to the local council houses as "new," meaning they were probably built after World War II. At this time, the Nazi bombing of England had left a severe housing shortage. Therefore, much of the council housing the government put up in that period was meant to be temporary, to last about a decade until the country could get its housing supply up to snuff.
The council houses Nat refers to are probably especially flimsy, and the story indicates that the birds are easily able to penetrate them and kill the inhabitants, including the many children who lived there. Nat has a solid, old stone farmhouse, but even that doesn't do him much good against the onslaught of the birds.
Daphne Du Maurier spent her adulthood in the region of Cornwall in southwest England, and it was the Cornish peninsula that provided settings for much of her fiction, including her short story The Birds. Du Maurier never states in her story that Cornwall is the setting, but she provides a tiny clue that, combined with knowledge of her biography and the importance of that seaside region to her life and stories (it is also used as a setting in one of her most famous novels, Rebecca), one can easily and logically deduce the location of this story. The Birds opens with a brief description of the atmosphere in which the following narrative will take place: “On December third, the wind changed overnight and it was winter.” This is soon followed by this reference to a particular geographic feature: “. . .far end of the peninsula, where the sea surrounded the farmland on either side.” And, for those uncertain of the country in which this story occurs, as those bits of information could apply to other areas of northern Europe or even the New England region of the United States or to the northern California area (where the Alfred Hitchcock film adapted from Du Maurier’s story takes place), Du Maurier makes frequent references to London throughout the story, as when the wife of the story’s main protagonist, Nat, has been listening to news reports regarding the strange and threatening behavior of birds: “It’s not only here, it’s everywhere. In London, all over the country. Something has happened to the birds.” Nat works on a farm, which further suggests a rural area. So, one can logically conclude that The Birds takes place in the rural area of England’s country of Cornwall.”
With respect to the question of “council houses,” Du Maurier, again, does provide a description to accompany her references to such domiciles. It can be suggested, however, that she uses council houses to represent the more foolish nature of much of the region’s populace. Nat is the perceptive, rational facilitator; he is surrounded, however, by disbelieving idiots whose shared characteristic is that they reside in newer houses than the old, well-built farmhouse in which Nat and his family reside. The first such reference to council houses occurs within the context of town folk ridiculing Nat for his vigilance in confronting this growing threat to humanity. Responding to his daughter, Jill’s friends, and explaining the skepticism and naivete of the people laughing at him for being armed with a farm implement, Nat considers these people’s natures:
“What’s the hoe for, Dad?”
"They crowded around him, laughing, pointing.
“I just brought it along,” he said. “Come on now, let’s get home. It’s cold, no hanging about. Here, you. I’ll watch you across the fields, see how fast you can run.”
"He was speaking to Jill’s companions, who came from different families, living in the council houses."
Next, with the birds relentlessly attacking, trying any way they can to enter the farmhouse in which Nat and his family are taking refuge, this solitary voice of reason considers his good fortune with respect to his home relative to that of the naysayers living in newer, more modern abodes:
“He thanked God he had one of the old cottages, with small windows, stout walls. Not like the new council houses. Heaven help them up the lane in the new council houses.”
And, finally, late in the story, Nat is watching large assemblies of birds that are, seemingly inexplicably, not attacking:
“Then he remembered. They were gorged with food. They had eaten their fill during the night. That was why they did not move this morning. . . .
“No smoke came from the chimneys of the council houses. He thought of the children who had run across the fields the night before.”
Du Maurier is suggesting that the families who lived in these newer “council houses” were the first to be killed by the marauding birds because they were built to more modern specifications that emphasized ease of access and visibility of the outside world. The council houses represent man’s obliviousness to the threats that confront him. If Du Maurier did, in fact, write The Birds as a parable about the threat of Soviet invasion and of communism, than the council houses represent those blind and oblivious to those threats.