UPDATED: 12.33PM An eye witness has described watching as a stolen car fleeing from police lost control, became airborne and smashed into a Hamilton house.

The dramatic series of events unfolded just after midnight.

One teenager has been arrested but police are still looking for a second person who ran away after smashing through the Fairfield living room.

Jayde Simpson was heading out for a late night pizza run with her mum and saw two police cars racing up Clarkin Rd with their sirens flashing as they turned right to pull out of their driveway. “I looked forward and saw another cop and thought, ‘Oh my god it’s a police chase’.”

A late model silver Toyota Altezza sedan was speeding along Heaphy Tce and tried to brake as it approached the Heaphy Tce and Clarkin Rd intersection.

“They were coming so fast on the corner because all of the cops were there. They would have seen us because our headlights were on and they would have freaked out and thought, ‘Where do we go’ and turned left and hit the island and gone straight through the give way sign.

“The car kind of got air and they were not sure where to go and they smashed into the house.”

Straight after the crash a police car did a u-turn to block the car in.

“The car was stuffed. All we heard was all of the windows smashing.”

Miss Simpson did not see the youths run off, but later saw a police officer return with a man.

A woman who lived directly behind where the crash happened said she slept through it, but her flatmate woke to police and police dogs running along the driveway next door to them.

The homeowner said he heard a loud thud when the car slammed into the house.

He and his wife were ordered out of the house by emergency services as a precaution in case the vehicle exploded.

"I just rushed in [the front room] and everything was in a mess," the husband told Fairfax.

"If we'd been up watching the Chiefs ... because we haven't got Sky, we could have been in there if it had happened an hour earlier."

The crash left a gaping hole in the front room but the husband said they were blessed it just missed the water mains.

Senior Sergeant Robbie Hermann of the Waikato District Command Centre said the vehicle went through the front wall of the house into the living room about 12.15am.

He said while there was "extensive damage" to the house and the residents were "very shaken", no one required medical attention.

Mr Hermann said the two people in the car tried to run away after the crash, but one was caught by police and arrested.

A 15-year-old has been charged with failing to stop for police and is being held in custody until his court appearance tomorrow.

Mr Hermann said police are still making enquires about the other person who was in the car who ran away after the crash.

A builder was at the house this morning boarding up the large broken living room window, while the elderly homeowners were understood to be at church.