Ms Diamond, who was in her 50s, was pronounced dead at the scene of the fire at Rossdowney Road on Sunday morning.
Emergency services were called to the fire at about 07:30 GMT.
Ms Diamond’s employers, the River Faughan Anglers Ltd, said she was known as “the face of the company” and her death had come as a shock.
“Heather has been our office manager for the past 16 seasons, working part time in the office, and more recently at home. Always cheerful, she would greet those anglers as they came to renew their permits with a smile,” the company said in a statement.
“During this and last season, Heather had been working for us from home, probably more than the 2 days a week that we asked of her, she was embracing the change to the new online way of working whilst isolating for her own health. Our thoughts and prayers are with Heather’s family and friends, in this darkest of days”.
In a social media post, Eglinton Community Hall, where Ms Diamond taught dance classes, said she “was a pleasure to be around, she brightened up our days, nothing was too much bother for her.
“Her online classes were a real tonic for all our older people during the last year. There have been many tears shed today and many more in the days to come”.
Foyle SDLP MLA Mark H Durkan said her death had left the local community “shocked and deeply saddened”.
Sinn Féin’s Martina Anderson said her “thoughts are with her family, friends and loved ones at this sad time”.
DUP councillor Hilary McClintock said there was a great sense of shock and loss from the local communities.
She added: “She was very well-known, she was very energetic, an adventurous lady, one who will be sorely missed.
“She was someone who was very well liked, full of life and it’s unbelievable that life, has been taken away so tragically at this time.”
The cause of the fire has yet to be established but police have said it will be “subject to investigation” with the Fire and Rescue Service in Derry.
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