Police have charged Nathan Matthews, 28, after his step-sister's body parts were found at a house a mile from her home in Bristol.
His 21-year-old girlfriend has been charged with attempting to pervert the course of justice.
Nathan is believed to be the son of Anjie Galsworthy, 49, who is married to Becky's dad Darren, 51.
A friend of the couple - who have a young daughter - told The Mirror: "I just can't believe it. I feel like I'm in an episode of EastEnders.
"[Shauna] messaged me on the Friday (February 20) and she asked me if I had seen Becky or I could help with the search."
They aded: "The police came to speak to me and as soon as they announced the ages I just knew it was them.
"She's just a normal person, they both are. There's no reason they could do it. I've been racking my brains but I just don't get it."
Detectives have also arrested four men – two aged 29 and two aged 23 – and a woman, aged 23, on suspicion of assisting an offender.
Becky Watts left home on the 19th February carrying her phone, her laptop, and her tablet computer.
Relatives reported the 16-year-old as missing the next day.
Just 12 days after her disappearance, police - acting on a tip-off - searched a house in Barton Court in Barton Hill, Bristol, and uncovered Becky's body parts.
Forensics made a fingertip search of the path leading to the house and removed dozens of bins from nearby homes.
Following the horrific discovery, Becky’s mum Tania, brother Daniel and grandmother Pat released a statement.
It said: “We are devastated to be told of this latest development.
“We are at an utter loss to understand why anyone would want to hurt our beautiful Becky in such a brutal way.
“We are grateful to the police for all they have done and are continuing to do in this investigation.”