Police and paramedics were called to the property on Station Road in Shirebrook, close to the junction with Vernon Street, at about 10.10pm last night (Friday), where the bodies of two women were found inside.
Detectives are treating the deaths as suspicious and have launched an investigation.
A 20-year-old man from Sheffield has been arrested in connection with the discovery and remains in police custody.
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Police were still at the scene today (Saturday), with a large cordon in place.
Jason Knight, 43, of Station Road, said: “This is a nicer area of the town, so it is certainly an unusual thing to happen. There has been nothing like this before.”
Mr Knight described one woman as “a quiet person who kept to herself”.
“It is very sad,” he added.
Jackie Freeman, 69, also of Station Road, said: “We haven’t lived here long, but we understand this is unusual as it is quite a quiet part of town.
“It makes you think that these things do happen, but we are not going to let something like this interfere with our lives.”
Another resident, Graham Wheatley, said the first he knew something was wrong was at around 10pm when he saw the police and paramedics arrive.
“It is terrible what has happened,” he said. “We have never come across anything like this before.
“I would see one woman when taking the dogs out. She seemed a nice-enough lady. We said good morning and hello, and she was always polite and friendly.”
Police say officers from Shirebrook Safer Neighbourhood Team will be carrying out high-visibility patrols over the weekend and will be on hand to speak to members of the public.
Anyone with information on the incident should call Derbyshire police on 101, quoting incident number 728 of February 26.