PLANNERS gave their support to 37 new homes at Pear Tree Park, Holme, despite concerns from neighbours about flooding and loss of light.
House-builder Russell Armer has already built eight houses on the land, which is earmarked for housing in the South Lakeland local plan, and has started work on 31 more homes.
The next stage of 31 houses and six flats has sparked seven letters of objection from neighbouring villagers, South Lakeland District Council's planning committee heard in a report.
Malcolm Hayton, who owns property near the site, asked planners to look at where all the surface water would go.
Building houses on the site would result in a lot of water draining into a small beck which was one yard wide at most, he said.
Houses were "sprouting up faster than mushrooms" in Holme village, he said, and he did not want to see himself "up to the waist in water on television" because of flooding as a result.
Frank Labbate, resident of nearby Trinity Drive, said the housing would be on rising ground, and walls and roofs would "tower up and dwarf" all of Trinity Drive.
"We would be living in a goldfish bowl," he told planners.
Mr Labbate said many residents had lived there for 25 to 30 years, enjoying the peace and quiet of the countryside, but now they found themselves amid a large estate.
Their quality of life would "never be the same again", and the only way they would be able to see blue sky in future would be "to look straight up".
Brian Smith, for Russell Armer, said a complete surface water drainage scheme had already been approved by planners and examined by the Environment Agency.
It took into account the needs of the houses currently being built, and those currently proposed, he said.
Water from roofs would drain to soakaways in the ground.
Mr Smith said the company had now agreed the homes backing onto Trinity Drive would be dormer bungalows rather than two-storey houses.
Russell Armer was also happy to put up a fence to prevent car headlights from glaring into windows on Trinity Drive.
Planners agreed the director of amenities and development should grant planning permission after talks had taken place with United Utilities about sewerage works to be carried out.
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