Plans to build 10 flats in the town have been approved by West Oxfordshire District Council.
Witney Building will demolish a house and erect a two-storey L-shaped building with the one-bedroom flats in Black Bourton Road, Carteron.
It will also create 12 car parking spaces.
Residents objected to the council, saying it was overdevelopment and there would be nowhere to put their recyling bins on collection day.
But the developer said the layout has been designed to prevent overlooking.