One person remains unaccounted for and an arson investigation has been launched following a fire at a terraced home, police have said.

Devon and Cornwall Police said five people had been arrested in connection to the fire and all were being held in police custody.

Devon and Somerset Fire and Rescue Service said crews were called to Honestone Street in Bideford, Devon, at about 20:15 GMT on Tuesday after reports a two-storey building was “well alight”.

The police said nearby properties were evacuated and residents were unlikely to be able to return home for some time.

The force said steps were being taken to ensure people could return to their homes as soon as possible.

Det Ch Insp Sam Smoothy said: “We would like to thank local residents and the Bideford public for their patience and understanding as our officers continue to investigate the circumstances surrounding the fire.

“One person remains unaccounted for at this time with next of kin being made aware.

“Incidents of this nature are shocking for any community. We are working closely with the fire service and local authority to ensure displaced residents are housed and looked after over the coming days.”

The Royal Hotel Bideford said it would be accommodating some of those displaced by the fire for a second night and had been told residents could not return home for “a few days”.

Matt Broadrick, the hotel’s duty manager, said: “We’ve been working quite hard to make sure the people are all accommodated.

“We’ve got people with babies and dogs that we’re all trying to help.”

The hotel’s owners Christina and Noah Sixton-Brend said the incident had been “horrific” for all involved.

Mrs Sixton-Brend said: “It’s such a small community and I think it’s so nice us and our staff are coming together to help people.

“The staff have been getting massively involved putting up beds and cots in the middle of the night – you just do what you’ve got to do.”

Mr Sixton-Brend added: “These will be people that the team will know, so we just want to be able to help as much as possible.”

A fire service spokesperson said crews put out the fire during the early hours of Wednesday but remained at the scene to carry out dampening down work.

Crews from 16 different stations were called out during the night to help tackle the flames, the fire service added.

The force added a large power outage in the area was connected to the incident.

Ken Parkhouse said he was on his way home from work when he saw the fire.

“It looked very scary,” he said.

“Most of the building was on fire and lots of people were out on the street watching what was going on.

“There were bright orange flames and heavy smoke which could be seen from a distance.”