Police have detained a suspect under the Mental Health Act as counter-terrorism officials raced to discover what led to the stabbing of three people, including a British Transport Police officer, at a Manchester railway station on New Year’s Eve.

Police said the suspect, a 25-year-old man who had been living in the UK for about a decade, remained in custody and was refusing to cooperate. He had been assessed by specialist medical staff, Greater Manchester police added.

On Tuesday morning, armed officers raided a property in the Cheetham Hill area of the city, where the suspect, who is being held on suspicion of attempted murder, lived with his parents and four siblings.

A police spokesman said: “The counter-terrorism investigation remains ongoing. There is nothing to suggest the involvement of other people in this attack, but confirming this remains a main priority for the investigation. The search of the address in Cheetham Hill continues.”

Neighbours had earlier been told by officers to go into their homes as they descended on the man’s house, a mile north of the city centre.

On Tuesday afternoon, tactical aid unit vans were stationed outside the property, with a police officer guarding the door.

Neighbour Alim Obeadlugh said he was out walking near the property when he saw armed officers. He said: “They just told me to go back inside. They did not even give me a chance to ask what it is about they just said, ‘go in.’ I thought it must be a serious problem and I asked them what was going on and they said it was a terrorism incident.”

Nousha Babaakachel said the man’s family came to live in the street about 12 years ago from the Netherlands.

A man was seen leaving the property shortly after the police raid, with his face covered in a black cloth and a hat covering his head. Neighbours said the blue VW Jetta in which he drove away belonged to the brother that worked at Manchester airport.

The incident, classified as critical, was being investigated by counter-terrorism police officers after the perpetrator was allegedly heard shouting Islamist slogans during the attack just before 9pm at Victoria station in the city.

Footage of the aftermath of the attack showed a man being held down by five police officers, with blood stains on the pavement. Another video showed the suspect shouting “Allahu Akbar” as he was put in the back of a police van. He was also heard screaming “long live the caliphate”.

Russ Jackson, an assistant chief constable with Greater Manchester police (GMP), described the attack on the officer and a couple in their 50s as frenzied and random in nature. It took place near the scene of the 2017 Manchester Arena bombing.

Jackson said there was nothing to suggest others were involved and that officers were keeping an open mind and taking into consideration the attacker’s mental health.

On Tuesday morning forensic officers were seen scouring the station and police were examining CCTV footage. Security officials in the government, police and the intelligence services were helping the investigation.

The BTP officer was stabbed in the shoulder, while the man and woman both sustained abdominal injuries, and the woman also received wounds to her forehead.

Jackson said the couple, who were in the city celebrating the new year, could be in hospital for some time after sustaining “significant injuries” during the attack. The officer, a sergeant in his 30s, had been discharged.

During a press conference, the GMP chief constable, Ian Hopkins, said: “Last night we experienced a horrific attack on people out to simply enjoy the New Year’s Eve celebrations in Manchester. My thoughts are with the couple who are still being treated in hospital for their serious injuries and with the brave British Transport Police officer who was also stabbed during the attack.

“I know that the events last night will have affected many people and caused concern. That the incident happened so close to the scene of the terrorist attack on 22 May 2017 makes it even more dreadful.”

Hopkins confirmed the incident was being treated as a terrorist investigation and that officers had been working throughout the night to piece together the details of what happened.

As Theresa May and Jeremy Corbyn paid tribute to the emergency services, police said the incident was one of several “serious crime incidents” in the city centre overnight, with 15 arrests being made and a total of 120 incidents recorded since 7pm on Monday. They said in a tweet just after 6am on Tuesday that officers had “done a great job of looking after people in the city”.

GMP said a large police presence would remain in place at the station but this was “not as a result of any increased threat. Please follow directions from officers on the ground and speak to them if you have any concerns.”

The North West ambulance service said it sent three vehicles to the incident and took all three victims to hospital for treatment. While the station was closed after the attack, the city’s fireworks display in Albert Square went ahead under increased security.

There have been no major terrorist attacks in the UK for the past year but MI5 and the police say they are dealing with 700 investigations into suspected terrorism. In 2017, there were five terrorist attacks – four in London and one in Manchester.

The terrorism threat level for the UK remains at severe, meaning an attack is deemed to be highly likely.