Thank you. We are looking for a beach town in the Algarve, somewhere where we can walk to restaurants, shops & beach.

Lagos has a beach within walking distance and more between the cliffs. This one looks as though it can only be reached by boat:


There's the ex-fishing village of Carvoeiro which must have nice eating establishment given that it has extensive expensive housing on the bluffs above the town:

Praia de Luz

My vote would also be for Praia da Luz, just west of Lagos, between Lagos and Burgau, provided that you'll have rental vehicles.
Although there's Aonda bus service from Luz (departs from the church) to Lagos, a car (or two) will give you much more freedom to explore the cliff formations, Ponte da Piedade and the other beautiful beaches of the Rota Vicentina, just north of Sagres.

Why Luz? There should be rental accomodations there, villas and apartments, that will fit your group, but it's a very popular resort area, so you'll need to book well in advance, as in now.

We stayed in a villa (at the time functioning as a B&B) between Lagos and Luz that is now a whole house rental with pool and yoga studio, the Quinta Bonita, but it sleeps 17, which is too large for you.
There are also villa accommodations in Porto de Mós, a quite pretty and very elegant area, 4 km. from the center of Lagos (10 min. by taxi), which is adjacent to the golden sand, 1-kilometer long Praia do Porto de Mós, surrounded by high cliffs and popular with wind surfers. Here there are also beachside cafés and restaurants. There are buses that run hourly to Lagos center, but again, for exploring the western Algarve, it´s far more advantageous to have vehicles (I assume that you will...).

The Belmar Beach Resort there has studios, 1-2- 3 bedroom apartments.

Thank you!

Take a look at Quarteira. It's exactly the kind of place that I think you are looking for!

Thank you!