A specialist parachute designed for an entire light aircraft has allowed three people to make a miraculous escape from a plane crash in the Blue Mountains.

The male pilot of the Cirrus aircraft managed to dodge houses and major powerlines before landing the plane in the front yard of a house at Lawson at 2.10pm on Saturday.

Soft landing: The site of the plane crash in Sayers Street, Lawson. Credit:James Brickwood

All those on board escaped serious injury with only one passenger taken to hospital for neck pain. The only damage done was to the house's front fence.

Resident Robert Ross, who watched the incident unfold as he chopped wood in his backyard, said if it was not for the parachute the plane would have crashed into his home.