We've just arrived in Budapest. It's a wildly romantic city. (Why does everybody go to Prague?) Budapest has a wonderful, beleaguered grandeur. Nowadays, however, its pavements are littered with McDonald's cartons - there's a hamburger joint on every corner. Its heavy, baroque buildings are still pitted with shell-holes from the 1956 uprising - nobody has the money to repair them, so the whole city is acne-scarred. The hammer and sickle has been removed from public places, the Lenin statues have been chucked out, but the talk is of how the Communists have returned, 1989 was just a blip, they never really went away. They've returned, strengthened with capitalist muscle, and those who hated them are in despair.

I've been sitting in people's flats, drinking a million per cent-proof palinka brandy and hearing their woes, most of which I don't understand because my Hungarian is hopeless. I only know about three phrases, and yesterday, when I woke up, I greeted my hostess with a carefully rehearsed "Good morning", only to realise I'd said to her, "I love you". Laborious conversations in broken English take place when I'm asked such impossible questions as, "Which is your favourite London department store?", "How large is your kitchen?" (theirs are tiny), and, most baffling of all, "How do you spell Connie Francis?"

Hungarians are very polite. Not in the street, particularly, but in conversation. They ask questions; they open doors. They shame me with their tiny incomes and meagre possessions. I feel chastened by what I take so blithely for granted. When they come to England they stand bemused in Sainsbury's as if they've arrived in heaven.

My favourite occupation in Budapest is snooping around courtyards. The huge apartment buildings are constructed in the old European style, around a central well. You can reach this from the street by pushing open a door and marching in, pretending you live there. There is a silence as you enter the lobby - an old building, breathing. A wonderful stairway spirals up - filigree ironwork, broken marble steps - lit by one dim light bulb. When you step through into the courtyard, the faded beauty takes your breath away. Walkways and balconies rise up around you, echoing with the sound of people's evenings - the clatter of cooking pots, the canned laughter of TVS. These buildings are masterpieces - Art Deco, Greek revival, baroque - but rotting away because nobody can repair them. It's like stepping on to the set of a Verdi opera.

Last week we drove down south. Having driven all the way from London - 22 hours, non-stop - we had got sick of our tapes and were reduced to listening to a Dub cassette belonging to one of my teenage children, which I had found under the seat. To my astonishment I adored it. I always told them their music was ghastly, but it was terrific to drive to, a pounding jungle beat. Stimulated by this, we drove at high speed, scattering Trabants driven by ancient farmers (not so ancient, probably. Probably my age, 48; people age here much faster. It is also easy to overtake a Trabant.)

Once we arrived we couldn't bear to get out of the car, and drove off into the countryside. It's proper countryside, worked by small farmers, and so usefully supplied with a network of dirt tracks. We bounced through a field of wild flowers where the huge storks, black and white and as stately as Egyptian wall paintings walked around, oblivious to our deafening music. We took off our clothes and swam in the nearby river, Hungary on one bank and Romania on the other (it looked exactly the same, of course). The water was delightfully warm, but later we were told this was probably due to the poisonous effluent coming downstream from Transylvania. We walked into the field and I picked 23 different kinds of flowers, including salvia, achillea and others that would have cost pounds 4.99 each at our garden centre back in London.

Hungarians are always telling you about their suicide rate.

It's supposed to be the highest in the world, after the Finns'. They tell you this with a certain emotional pride. When you're staying where we stayed, in a concrete high-rise block surrounded by about a hundred others, you can understand it. The communist housing estates are mind- numbingly awful, rising out of nowhere to no purpose. We escaped to Lake Balaton, where the whole of Hungary goes for its holiday. It's huge by any standards, and for people who have never seen the sea, and who until recently have been forbidden to travel, it must be even more exhilarating. We gazed into the gardens of holiday homes. A statue sat in one of them. It was Lenin. Was he there as a sort of garden gnome, or as a shrine? Whichever, he seemed to be growing larger by the minute, through the foliage.

Deborah Moggach's latest novel, 'Seesaw', is published by Heinemann.