A man was being questioned today over the murder of his grandmother and aunt.
The 21-year-old suspect was arrested at the scene of the killings in Fulwood, Preston, shortly after the emergency services arrived.
The bodies of Maureen Allen, 79, and her daughter, who has not yet been identified, were discovered in their semi-detached bungalow which had been set alight.
Police confirmed both victims had sustained "injuries", as reports suggested a stabbing had taken place in the house.
The alarm was raised just before 2am today by another relative of the two women who was concerned about a number of phone calls they had received.
Police and fire rescue services were confronted by the burning house and found the two bodies inside.
Stephanie McDougall, the daughter of Mrs Allen's next-door neighbour, said she received a "distressed" phone call from her mother at about 1.55am.
She said: "She thought the house was on fire and someone had stabbed somebody.
"I didn't know them myself but they were nice people.
"It's very upsetting. It's shocking that something like this could happen here."
Neighbours said Mrs Allen was in a wheelchair and could often be seen tending her garden in the leafy suburb.
She had lived in the quiet cul-de-sac, off Longfield, for more than 25 years and it is understood that her daughter and grandson had moved in recently.
The close containing eight similar bungalows was cordoned off as crime scene investigators were on the scene.
There was no obvious fire or smoke damage to the exterior of Mrs Allen's home.
A neighbour living opposite, who did not wish to be named, said: "We were woken up by the sound of fire engines. There were three outside.
"A while later I saw a man wearing handcuffs being put into a van.
"There was no struggle, he just walked calmly in.
"I didn't know the people who lived there. Everyone keeps themselves to themselves a bit."
A blonde middle-aged woman in a red coat - believed to be another daughter of Mrs Allen - later arrived at the scene before she drove away five minutes later with a police escort.
Detective Superintendent Neil Esseen, who is leading the investigation, said: "We are still in the early stages of this inquiry and are trying to establish the circumstances surrounding the deaths of the two women.
"I have a team of detectives working on this investigation who are following a number of lines of inquiry."
He added: "The alarm was raised by another relative who was concerned about some phone calls they had received."
Mr Esseen said formal identification had yet to take place and that post-mortem results were expected later today.
Asked to comment on reports that someone had been stabbed in the house, he said: "I am not going to speculate on the cause of death yet but both bodies had received some injuries."