The mediation service is being drafted in after 9,452 reports of antisocial behaviour were made to police and a further 500 complaints dealt with by East Durham Homes in the past year.
It is being launched by District of Easington Council, EDH and Easington Community Safety Partnership with the aim of getting to the root of neighbourhood disputes which are making people's lives a misery.
Pam Cox, a specialist support manager with EDH, said: "Even the smallest dispute between neighbours can escalate into something much bigger, and failure to find a resolution can affect a person's quality of life and even place their home in jeopardy.
"With effective mediation, however, it's possible to resolve issues peacefully and effectively, producing a win/win outcome for all those concerned."
The EDH, which manages about 8,000 homes on behalf of the council, has previously used mediation to deal with disagreements between tenants, but it has been limited to those who rent its properties.
The new service will give the authorities a greater scope for dealing with issues involving all kinds of residents and is being run through a year-long contract with independent firm Unite.
Residents referred to the new service will be asked to attend face-to-face mediation sessions with their neighbour and could also be given information on other local services that may help resolve their problems.
Cheryl O'Hara and Margaret Glenwright are among the first residents to benefit from the service.
The pair, who live in neighbouring council properties in Jude Place, Peterlee, were referred to the service by EDH after Mrs Glenwright raised concerns about the behaviour of Miss O'Hara's teenage son and some of his friends.
The mums were invited to attend a session together where they were encouraged to discuss their problems and since then have agreed to stay in contact so they can discuss and resolve any issues between their families.
They also receive regular visits from staff with EDH, the council and other agencies, who offer help when needed.
Both women say the intervention has made a dramatic difference to their lives.
Mrs Glenwright, 60, said: "I was getting eggs thrown at my windows and abuse shouted at me in the street, and although Cheryl and I never actually fell out, I didn't feel I could approach her about it.
"The situation was really getting me down but the mediation made a massive difference.
"If I have a problem now I know I can just knock on her door and talk to her about it."
Following the mediation session, Ms O'Hara, 38, also agreed to attend parenting classes.
She said: "My son's behaviour has definitely settled down as a result of the classes and Margaret and I have really stuck to our commitment to talking through our problems."
Anyone who would like further information about the service can contact Amanda Fulcher, EDH Enforcement Manager, on 0800 032 0835.