A modern sheltered housing block for over-55s on an Oxford estate has been welcomed by its new occupants – 40 years after its predecessor was unveiled.

The new £1.5m Alice and Margaret House, in Rose Hill, has officially welcomed its first residents as part of the regeneration of the area.

The crumbling original building – which was divided into Margaret House and Alice House and is currently awaiting demolition – stands directly opposite the new building in Desborough Crescent and was opened in June 1969.

The 26 new flats for Oxford Citizens Housing Association form part of the Rose Hill regeneration scheme, which will has seen about 100 post-war Orlit houses razed to the ground. The project will see 254 new homes built by 2011.

The work is being carried out by Bryant Homes and will create three new roads which will be named after Rose Hill stalwarts John Parker, Norman Brown and Constance Norman.

Gordon Hall, 83, had lived at Margaret House for 16 years and watched his new home being built from the foundations up.

He said: “It’s heaven, absolutely great – they have thought of everything.

“We really were taken seriously and got to say what we wanted in terms of the kitchens, bathrooms and so on.”

Fellow resident Florence Tomlinson, 93, who has moved to the new Alice and Margaret House after 45 years living in Lenthall Road, said: “I didn’t realise the flats would be so spacious and lovely. I was amazed. I do miss my garden, but I have been able to bring some of the plants from there and give them a new home on my balcony in the new flat.”

Longstanding Rose Hill resident and councillor Bill Buckingham, a former Lord Mayor of Oxford, said: “We all thought we would never see this happen.

“It’s marvellous what’s taken place, it really is.”

The original houses were named after Margaret Somervell, who donated two homes to be sold to benefit the housing association, and Alice Smith, who died in 1679 and left land at Littlemore to be used for the people of Iffley parish.

Housing association managing director Andrew Smith said: “We wouldn’t be where we are today without the help and support of the people of Rose Hill – particularly the tenant development group that first met in June 2005.

“They provided a vital role in helping with the design and communicating with the wider estate as well as selecting the developer.”

Rose Hill and Iffley city councillor Antonia Bance said: “Many people told me it was very important for older people, who know and love Rose Hill, to have suitable sheltered housing provided.

“I’m very grateful to the city council, OCHA, Bryant Homes and in particular to local people – both those directly involved in the redevelopment and those who live nearby – for all their efforts over the past couple of years.

“Everyone has made great efforts to ensure disruption is kept to a minimum and that people know what is going on.

“Let’s continue to work together to make Rose Hill an even better place to live and that we can be proud of.”