The location holds special memories for William, who holidayed there with his parents and brother Harry in 1989.
A source told The People: “William and Kate are acutely aware that in these difficult times being seen to take a luxury honeymoon would not look good and send out entirely the wrong signal.
“Neither has lavish tastes and a domestic location would be ideal to ensure they are secure.”
Until now the couple were thought to be honeymooning in Kenya, the country where William proposed.
The choice of a domestic location is in fitting with the modest plans Kate and William have made for the wedding so far.
They chose Westminster Abbey over St Paul’s Cathedral to allow a smaller ceremony. Kate will also be arriving by car rather than carriage on her big day.