It's hard to say what makes the biggest impression as you arrive in Tenby: the dazzling sweep of the town's North Beach curving round to a little picture-book harbour by South Beach, the high medieval walls encircling the old town lanes or simply the variety of colour on the buildings.

Tenby's multicoloured façades - yellows, pinks, blues and reds - lend this Pembrokeshire resort a lively air. This is one of the hotspots riding high on Wales's cultural renaissance, epitomised by Duffy's storming of the charts and the TV awards and audiences being hoovered up by Gavin and Stacey, Torchwood and Doctor Who. Here, I spot posters for various festivals: folk last weekend, an arts festival next month (headed this year by Julian Lloyd Webber), and blues in November. A winter carnival livens up December, while the De Valence Pavilion will shortly offer work by Ibsen, Shakespeare and Dylan Thomas, who lived near by in Laugharne.

Style-conscious buyers are flocking to Wales's seaside resorts, and the influx of money is helping to restrict falls in property values - prices are down just 6 per cent across the Principality, compared with 10 per cent for the rest of the UK, according to the agent Knight Frank. Already, signs abound that there is plenty of money as well as culture in these parts - if the number of £20 dishes on local menus are anything to go by.

I get a deeper insight into Tenby's heritage at the museum perched among ruined fortifications overlooking Castle Beach, which chronicles strong links forged with the West Country ports just across the Bristol Channel - reason perhaps why Pembrokeshire remains arguably the most “English” of Welsh counties.

The parallels I'm drawing, though, are to the West Country - only with fewer Home Counties types and lower prices for equally desirable houses. Pastel-hued Georgian townhouses perch around the harbour, including one whose view inspired the young George Eliot. Colourful cottages line the lanes around Tudor Square, while Edwardian semis sit behind the Esplanade, five minutes' walk from the golf course, the breathtaking South Beach and a railway station that links the town to Swansea and Cardiff.

FBM on the high street is both Tenby's leading holiday rentals agency and one of its principal estate agents. Its head, Tim Brace, says that buyers often fall for the place on holiday then move there. Tenby remains relatively affordable: the average selling price rose from £215,000 to £237,000 in the year to June, a rise of 10 per cent, Land Registry figures show, although the number of sales has levelled out. Brace says that prices are holding steady: “Houses tend to be immaculate - a lot of money has been spent on property in Tenby.” Prices start as low as £75,000 for a one-bedroom flat, although £120,000 is typical for larger one-bedroom flats in the old town. Two-bedroom flats on the edge of town start at £130,000, although more central ones range from £150,000 to £230,000.

At the top end, FBM has a sixbedroom period house overlooking South Beach on the market for £895,000. Brace says: “But a lot of people come with a budget of £250,000 and find what they want.”

As well as people taking early retirement, there is a growing number of younger buyers who are attracted by good schools, such as Greenhill (junior and primary), decent facilities (leisure centre with pool, health centre) and the town's relaxed atmosphere. Brace says: “Fifteen years ago Tenby hotels shut in winter. Now they're busy year-round with weekenders and walkers. And it's not just tourism: conferences are also providing continuity of employment.” Large oil/gas engineering projects at nearby Milford Haven have also brought workers and wealth pouring in.

There's also a pleasing compactness to Tenby, with almost everything concentrated within or just beyond the medieval walls. Tenby's rise as a resort as well as working port came in Victorian times, when the town's waters and beautiful natural setting became a watchword as balms for both body and soul.

You can seek deeper spiritual solace at the Cistercian monastery on Caldey Island, just offshore. Most, however, come to see the building, buy some of the monastery-made chocolate and perfume, then explore the island from its wood-backed beach by the landing quay to the sea cliff paths along the southern side.

Walkers are frequent sights in Tenby too, pausing on sojourns through the Pembrokeshire Coast National Park. One of the best places to relax is Caffe Vista at the top of Crackwell Street. Opened last year, this conversion of a rundown Georgian house exemplifies Tenby's appeal: stylish modern updating of a generous 19th-century space, fine Greek dishes alongside fabulous cakes, plus the friendly cosmopolitan young owners,Yanni and Claudia, and a view from the balcony that perks you up as much as the top-notch coffee.

There's a poem in the Tenby Museum, dating to the 9th century, that sings the praises of the town, from its fine fortifications to the way “hoarse seabirds haunt the crest of the crag”. The fortifications are still fine, as are Tenby's prospects.

FBM: 01834 842207, frankmason.co.uk

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