You can probably just leave it and take on an extra module in year two , but it'll be capped at 40%. Speak to your tutor though and make sure it is ok to do this . Even though , in most cases , first year doesn't count . You still need to pass in order to continue to second year.
I failed one module in year 2 because i missed an essay deadline , I did a 7th module in year 3 but it was capped at 40% so you could write the essay if your life but it can't be marked above 40. Overall , it didn't have much bearing of my overall grade (2:1) but obviously wasn't an amazing result .