In broad terms the ads are ranked in this order:
The sort order is also 'nested': e.g. A brand new bold ad appears above a brand new free ad and a more relevant located brand new ad will appear above a less relevant brand new ad.
This will only be applicable in certain searches. If a postcode is searched on for instance, it has no effect. Also, with a wider search such as "London" it has no effect. But with a search on say "West Didsbury", it will return all ads in that postcode (M20), but ordering those marked as specifically being in "West Didsbury" first, above those in say "East Didsbury".