Local people wanting to live in the seaside village of East Portlemouth have been given a welcome boost.

Isobel Waterhouse, who was born and bred in the village, has made available four properties worth about £500,000 each for rent at under the market value to local people.

East Portlemouth, near Salcombe, has been dubbed the second home capital of the South Hams.

Nearly half of the houses in the village are used on a part-time basis, figures from South Hams District Council (SHDC) show.

Seventy-one of the 143 properties in East Portlemouth are second homes.

And the knock-on affect of rising prices has caused heartbreak for local residents who have been priced out of the market.

This has led to growing fears that the community could die.

"I should hate to see this village die," Waterhouse, who inherited the properties from her grandmother, told BBC Devon. "And if we are not careful and we don't do something, I believe it will die.

Isobel Waterhouse: "Local people cannot afford to buy in the village. So we lose our local people and we lose our young families growing up."

"Local people cannot afford to buy in the village. So we lose our local people and we lose our young families growing up."

She added: "I'm doing it because I hope that other people will enjoy the places that I have and for young families to grow up in this magical place."

A local trust will keep the homes for local people.

The first local tenant to benefit from Waterhouse's scheme is 26-year-old boat builder Tristan Stone.

His family has made traditional Salcombe Yawl sailing boats in the village for more than 70 years.

Stone pays only £300 a month to live in a cottage rented from the trust.

"The house opposite me has just been sold for £5m. At those prices there is no way I could afford to rent or buy somewhere in East Portlemouth," he said.

Parish council chairman Lindsey Lindley told BBC Devon: "Isobel is single-handedly saving our community and the future of the village.

"We have an ageing population and it is very difficult for people to buy homes they can afford and to work in the village.

"If it carries on we will not have much of a village life left.

"Her generosity in setting up this trust fund is just what we need for the future."

The South Hams district is home to 4,869 holiday homes - 11.7 per cent of the total housing stock.

In November 2003, South Hams became the first council in the country to cut discounts on council tax for second homes.

The council decided to reduce the second home owners discount from 50 per cent to 10 per cent.

According to the SHDC, the measure has helped to raise an extra £2m a year. This money has been spent on a number of affordable housing projects in the area.

The 90 per cent rate is the maximum permitted under the Local Government Act 2003.

In 2006, the South Hams had an average house price of £282,000, but an average income of less than £18,000 - a price to income ratio of nearly 16, one of the worst in the whole country.

Local people needed an average income of nearly £77,000 to get a mortgage last year.