Is that the way to do it? PM tightens his belt and opts for beach huts and Punch & Judy

Children scatter across the warm sand. Pensioners in rolled-up trousers recline by their beach huts. Pretty pubs pour a perfectly lukewarm pint of Adnams ale. Southwold is famed for serving up the traditional family-friendly beach holiday. But the mood in the small Suffolk town yesterday after it was revealed as the destination of choice for the Brown family holiday might leave Gordon and Sarah wondering whether aides could get them that last-minute deal to Magaluf instead.

"He can take a long walk off our short pier," said Lewis Gray, enjoying the watery sunshine by his beach hut.

"It's a great place but it's not the right place for him," said a holidaying schoolboy pointedly. "A desert island would be better," barked his grandfather.

It appeared, however, that the prime minister could at least enjoy the hospitality of the most unlikely of venues - Southwold, Reydon and District Conservative Club. "If he wants a drink and something to eat he'd be most welcome," said Derek Smith. "At double price," his wife, Mary, the club secretary, added quickly.

Brown's decision to eschew the exotic Caribbean sojourns of his predecessor sends a signal about his frugality and support for the domestic economy as a recession approaches.

But while Southwold may appear a humble bucket-and-spade seaside resort, it is also an affluent, expensive favourite of the upper middle-classes and celebrities such as Richard Curtis, Bill Nighy and the novelist Julie Myerson, who all have homes in the area.

With a high street full of fancy clothes shops and delicatessens, the price of a beach hut reaching £50,000 and tiny fishermen's cottages changing hands for upwards of £400,000, many young families have been priced out of what some locals complain is Suffolk's least affordable town.

More than 40% of houses are now second homes; some locals believe that figure is closer to 60%. "There are less people living here now than there has been for years," said Smith. "It's lost a lot of character. Houses that used to be fishermen's cottages with families are now empty for eight months a year."

Some elderly locals feel frightened in the winter, living on streets where there are no neighbours and no lights on. "People buy these houses," said another local, "and it's almost a status symbol - 'I have a house in Southwold'."