Well I'm not really an expert in surfing but for everything I hear yes Portugal can be the place to be, offering hundreds of kilometers of nice beaches, many of those quite deserted and with great waves. However, this very nice areas for surfing are not exactly the warmest in the country both in the water and air temperature, but definetely a lot better then Devon or Cornwall.
Peniche is probably the centre of the surfing with a lot of people staying there to surf in hostels and hotels. It is a reasonably small fishing village that organizes the portuguese competition for the world bodyboard and surfing championships.
Another place to go is Ericeira (www.guiadacidade.pt/portugal/…). The town has some hotels and reasonably cheap lodging. Close by is Ribeira de Ilhas a Meca of the portuguese surf for a long period of time (www.guiadacidade.pt/portugal/…).
Another place to stay is Cascais (www.guiadacidade.pt/portugal/…) . Close to Lisbon (45 minutes by train) it is also reasonably close to some unspoilled great beaches such as Guincho (www.guiadacidade.pt/portugal/…). There are some other beaches a bit more city like and crowder that are warmer than all the previous, such as Carcavelos (www.guiadacidade.pt/portugal/…).
A little bit south in Albufeira Lagoon you'll have nice conditions to do surfing in the sea and other sports in the lagoon. Costa da Caparica is also nice.
All of the places I have spoken before are reasonably close of Lisbon at not more than 120kms of the city. Another place where you can go is the Alentejo coastline full of unspoilled beaches. Besides a youth hostel and some shy hotels here and there there are many farms converted to charm hotels that you can see for instance in www.wonderfulland.com. Some of the best beaches are Bordeira/Carrapateira (www.guiadacidade.pt/portugal/…), Monte clérigo (www.guiadacidade.pt/portugal/…), Arrifana (www.guiadacidade.pt/portugal/…) or Amado (www.guiadacidade.pt/portugal/…).
Hope this helps and if you need further informations just ask.