A few friends and I are looking for a small Spain/Portugal beach town or village to stay at for a week. We want something scenic, ideally with cliffs or terrain on the beach. We are all 28 to 30 and looking to have a good time, but are more into laid back bars vs. loud clubs and crowds. Something with a backpacker feel may work well. Any suggestions? We are going in early-mid Sept.
Anywhere on the coast of the western Algarve in Portugal is beautiful, laid-back and in easy reach of Lagos - a very pretty, traditional Potuguese town that also has good nightlife. The Western Algarve is not like other areas of the Algarve that are overrun with British tourists and tacky resorts. Carrapateira on the coast is probably my favourite. It has two beaches - Amado and Bordeira (Bordeira is my favourite - it's a huge beach and very beautiful with hardly anyone on it). Carrapateira is quiet but about 30 minutes drive from Lagos. There are also plenty of other beaches places to explore.
I spent the month of August in a little town in northern Portugal on the coast - Praia de Mira. It is a couple of hours west of Porto and an easy, beautiful train ride to get there.
Praia de Mira has that laid back vibe, but there are excellent restaurants and bars on or near the beach and in the town. The food is AMAZING -- fresh fish, excellent grilled vegetables, and local wine is vino verde. I spent most of my time on the beach (there were not cliffs nearby, that I knew of). There are some campsites near by, lots of European vacationers and backpackers. Excellent coffee spots too. It very cool to see old school fishing on the beach -- fisherman would use oxen to pull nets right out of the surf. I'd highly recommend it.
Very scenic but unfortunatelly full of tourists because of it, there is Nazaré, Portugal.
Cliffs, fishermen, beaches, surfing, traditional painted dish... Everything is there.
If you can avoid crowd and walk on the small streets, you can even find cheap traditional old fashion restaurants where the dining room has only one long table with benches and everybody around it.
I would advise Vila Nova de Milfontes in the Alentejo region of Portugal. Its still very unknown to tourists. You can probably get cheap accomodation at this time of year and it's easy to get there by bus.
Another option would be Porto Covo (near Milfontes). But that place almost stops in winter. If you really want it to be quiet, then this is it.
My recommendation is to go to the Cabo de Gata, specifically the town called San José. It is in the south of Spain, in Almería province, so in September you will have very good weather (in the north the water temperature is very cold in September). The Cabo de Gata is a protected natural park area, semi-desert, where you will find cliffs, long sand beaches, small stone or sand beaches, a lot of trekking routes, cheap accomodations, quiet villages, traditional spanish bars, not too crowded, hippie/backpacker feeling... The only problem (if this is a problem for you) is that most beaches are clothes optional.
As you have asked specifically for "backpacker fell", let me recommend to go to the Albergue San Jose (San Jose hostel, sorry the website is only in Spanish, if you need some translation, please let me know). Here you will pay 12 euros for a bed in a 4-people room with shared bathroom. The place is not very close to the beaches, but there is a public bus that will take you for a couple of euros. If you are looking for something more... wild or hippie, it's quite usual to camp in the beach in this area (it's not legal, but the police rarely goes to the beaches). Even there is a permanent hippie-like campament, but that's another history.
All images were taken by me last summer.