Nowadays, all town centres seem the same. Mix and match an M&S store, a Next, some estate agents, a few dead-in-the-daytime pubs and a burger bar around a pedestrianised precinct and you have a snapshot of them all.

But Totnes in Devon is decidedly different. Walk up Fore Street, the steep hill that is the main shopping street, and you are in a time warp. There isn't a chainstore logo to be seen, just lines of small shops. Real shops, too: butchers, bakers, bookshops, and even a toy shop. It could be a scene from a 1950s Ealing film. Then you look closer. There is Green Fuse, an eco-friendly funeral parlour; Rhythm and Light, which sells crystals and fossils; and Fairies on the Rise, which is to do with, er, fairies. The bustling Friday market demonstrates that dreadlocks are inordinately popular, velvet is in vogue again, and kaftans are making a comeback. The penny drops.

Far from being just another prosperous market town, Totnes is a centre of what style gurus call “boho chic”. The bohemian spirit of Totnes is certainly proving popular. In recent years there has been an enormous influx of “blow-ins”, as the locals call incomers. James Waring, of Peter Symonds, a local estate agent, reckons that 60 per cent of the people coming through his doors are in search of the hippy good life.

“This is one of the few places in Britain where people really do march to a different drum,” says James Willis, a dentist who moved here from Bath nine months ago, paying £300,000 for his quaint two-bedroom cottage built into the old town wall. “It's too easy to describe it as an alternative culture: it's more than that. Totnes is vibrant and welcoming, with a wonderful artistic community. We love it here.”

It is the local schools and colleges that the town can thank for its arty vibe - particularly nearby Dartington Hall, a pioneering charity that works for the advancement of the arts, environment and social justice. Dartington College of Arts was founded by Leonard and Dorothy Elmhirst in 1925; the college, and Dartington Hall Trust, comprise arguably the leading arts and crafts centre of the South West - although the town has been shocked by the recent merger of the college with University College Falmouth, which means that Dartington College will move to the Cornish town in 2010. Other liberal educational establishments, including the local Steiner School and the Sands School in nearby Ashburton, where lessons are optional and students and staff are on first-name terms, also exert an influence.

“Just about all my school friends went on to make careers in the arts,” says Phillipa Woodgate, 26, a dancer who now lives in London, who attended the Steiner School and King Edward VI Community College. “This was a fabulous place to be brought up, and I still return whenever I can. Totnes is a lovely bubble, something apart from the real world.”

So keen are some in Totnes to preserve the town's independence that they are circulating the “Totnes pound”, the idea of a group called Transition Town Totnes. People can spend the 6,000 Totnes pound notes in circulation only in the 60 local businesses that accept them, ensuring that goods are sourced locally and fuel usage is kept to a minimum. “It's definitely improving links between local businesses,” says Noel Longhurst, of Transition Town Totnes. “Our aim is to reduce the town's dependence on oil and this is a positive, fun way of doing that.”

Predictably, house prices in Totnes are high. Being on the Reading-to-Plymouth railway line, with direct trains to London, makes it just within range for occasional commuters - those who go to London perhaps once a week. Others are attracted by the town's proximity to the coast. “But it's not solely focused on tourism like the rest of the area,” explains Waring. “Salcombe and Paignton are great, but they only come to life in summer.”

Totnes has remained largely unperturbed by the market turmoil that is affecting other parts of the country, although some sellers have had to curb their expectations. Agents put this resilience down to the premium that the town commands. Gordon Maunder, of Marchand Petit in Totnes, says: “Prices here are as protected as they could be. Demand is strongest in the middle and upper ends of the market.” He says a two-bed apartment with a water view costs from £300,000, a four-bedroom period terraced house from about £400,000, and a four-bedroom detached period property from £625,000.

Totnes is one of the few towns where you pay more to live near the centre: late-night nastiness is not a problem here. Few new homes have been built in recent years, but Midas Homes is building 51 handsome houses near the centre, more than half of which will be affordable.

However, not everyone foresees a rosy future for Totnes. Cradling a glass in Rumour, a popular wine bar, one middle-aged Totnes local, who would not be named, claimed: “You are witnessing the last gasps of the old Totnes. When Dartington College moves to Falmouth it will make a tremendous difference to the arts in the area. Sky-high house prices will mean the younger generation won't be able to afford to live here any more, so the town will soon be filled with blow-ins chasing their eco-dream. Totnes will become a lifestyle choice rather than a living town with its own organic culture.”

Willis disagrees. “I think the vast majority of newcomers to Totnes contribute to the town,” he says. “They bring a lot of energy and new ideas. They may come here late in life, but they don't come here to stagnate.”

Fact File

The average house price in Totnes is £333,220, compared with £229,772 for England and Wales as a whole (Land Registry).

The average house price in Salcombe, Devon, is £521,035.

The average detached house in Totnes costs £429,423 (£352,688 in England and Wales).

The average semi in Totnes is £248,470 (£204,306 in England and Wales).

Prices in Totnes have risen by 62 per cent over the past five years.

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