One witness who works in a shop near the second-floor Birmingham flat said: "The man from London lived here."
He added: "They came and arrested three men."
Another resident said he recalled two men living there.
He heard one man in the flat speaking on the phone in what he described as an "Arabic or Pakistani accent", saying he had heard it "for the last two or three nights".
One resident said: "There were definitely two men and one woman and they were fairly young. There are horrible conditions up there and there have been problems with that row of flats before."
Hagley Road was sealed off by officers for several hours as the raid was carried out.
The road is in the well-heeled district of Edgbaston - a cricket-loving corner of Britain's second largest city that is unused to the sight of armed police blocking off streets.
Stuart Bailey, who lives four doors down from one of the flats raided, said: "There were a load of armed police in the street. They were all dressed in black and armed with what looked like MP5s (submachine guns) and one of them had six ammunition magazines strapped to his leg."
Lucas Camoes, a 23-year-old warehouse worker, said: 'It's a very calm area. There are loads of university students here so it's very surprising this happened right here.
Police said five men and three women arrested in overnight raids in Birmingham and London were being investigated "on suspicion of preparation of terrorist acts".
They include a woman in east London, a man and a woman in Birmingham and a man and a woman at separate locations in Birmingham.
Their ages range from 21 to 58.
Masood, a UKborn resident of the West Midlands in central England, was once investigated for extremism by British authorities but was not currently on a terrorism watch list.
His convictions ranged from 1983 to 2003.
Police said he "was not the subject of any current investigations and there was no prior intelligence about his intent to mount a terrorist attack".
However, he was known to police and MI5 and had convictions for assaults, including GBH, possession of offensive weapons and public order offences.
Masood was born in Kent on Christmas Day in 1964 and detectives believe he was most recently living in the West Midlands. He was also known by a number of aliases
The police confirmed he was a British citizen.
Over the course of two decades, Masood chalked up a range of convictions for assault, grievous bodily harm, possession of offensive weapons and public order offences, police said, with the offences taking place between 1983 and 2003.
Prime Minister Theresa May said he was once investigated by the intelligence service MI5 "in relation to concerns about violent extremism".
But Masood had never been convicted of terrorism offences and "was not the subject of any investigations," the police said, noting there was "no prior intelligence about his intent to mount a terrorist attack".
Image 1 of 16: People stand near a crashed car and an injured person lying on the ground, right, on Bridge Street near the Houses of Parliament in London. Photo / AP
At 52, his age has been highlighted by commentators as unusual, with most Islamist extremists behind similar attacks far younger.
Although the police believe Masood acted alone, the Islamic State group claimed he was one of its "soldiers" acting on a call to target countries fighting the jihadists in Iraq and Syria.
Masood rented the car used in the attack from the Solihull branch of Enterprise, on the outskirts of Birmingham, the company confirmed in a statement.
According to the BBC, he told the car rental company that he was a teacher.