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A fire at a spa on Goswell Road, Islington is believed to have been caused by oil-soaked towels heating up and catching fire.
The staff room on the ground floor was badly damaged by fire and there was heavy smoke throughout the ground floor. There were no reports of any injuries.
Residents living in flats above called 999 after a fire alarm sounded.
A London Fire Brigade spokesperson said: “Many spas use oils, which can soak into towels and are not easy to wash off.
“In some cases, when the towels are put in tumble dryers and then folded and stacked, the heat from the tumble drying cannot escape. The high temperature builds up to a point where the towels smoulder and eventually ignite.
“If you are washing and then drying on a hot cycle, always use the cooling cycle on the tumble dryer so it cools down and allows the heat to dissipate properly, before stacking laundered items together.
"The incident also shows how vital it is to have a working smoke alarms, not only in homes but also in businesses. The alarm gave an early warning to residents in the flats above and quickly call 999.”
The Brigade was called at 0002 and the blaze was under control by 0101. Firefighters from Islington, Shoreditch, Euston and Dowgate fire stations attended.