Homes have been evacuated after a 30ft (9m) hole appeared in the back gardens of bungalows in Egremont in Cumbria.
The hole appeared overnight and quickly filled with water.
The area was used extensively for iron ore mining and the collapse is thought to have been caused by subsidence.
Eight properties in the town's Greenmoor Road, mainly used by the elderly, have been evacuated as a precautionary measure.
The properties are owned by Home Housing, which has arranged for structural engineers to visit the site.
The hole, which quickly filled with water coloured red because of lingering iron ore deposits, emerged in the early hours of Sunday.
Egremont town councillor Margaret Woodburn, who represents the area, said she visited the site on Sunday, just hours after the hole appeared.
She said: "It seems to have happened during the night.
"People heard some rumbling noises, but thought it was thunder or fireworks from a maritime display at nearby Whitehaven.
"We are just lucky this didn't happen during the day when people were in their gardens and there were children and pets playing around.
Residents Mr and Mrs Milton were evacuated from their home.
"It's been a shock to a lot of people. Those moved out are staying with relatives."
David Fisher, managing director of Home Housing North West, said: "We are waiting to see what the results of tests will be.
"Everyone has pulled together very well. Most of the residents elected to stay with relatives. Only one elderly resident required hotel accommodation because of the special needs involved.
"We would hope that the hole would be able to be filled and capped and that people can move back in soon."
Emergency services have cordoned off while experts assess the danger to nearby properties.
Dave Banks, of the West Cumbria Mines Research Group, said: "It would be ill-advised to frighten people unnecessarily, but most of Egremont sits on top of the Wyndham Mines, which are full of water.
"It is undoubtedly this water, or the action of it that caused the infill to go.
"The threat to the adjacent bungalows is real, and when the police arrived, I urged them to evacuate the residents from at least the three nearest bungalows."