Juan Flores and his family were moved from London to Ferryhill to a house with broken windows, graffiti outside and a broken door.
They say they were “forced” to sign a 24-month lease when they arrived.
Since moving in, they’ve been spooked by men in balaclavas at night who would come into their backyard and peer into their windows.
Hounslow Council advised the family to contact them directly or the local police and support agencies.
Mr Flores described how his family were “terrified” and wanted nothing more than to move back to London.
The 48-year-old said: “We are not happy because the house is not good.
“In the past, people used to sell drugs in the house. We heard that cocaine and alcohol are sold here.
“We lived in Hounslow before we were moved here. There are broken windows, graffiti on the house and men coming with balaclavas. They called us.
“We are scared and horrified. We just want to move back to London. We had friends there.”
“I am worried about my son and daughter. It was very difficult to live here.”
Citizens Advice County Durham confirmed they are currently working with people across the county who have been relocated from London.
A spokesman said: “We are concerned that people living in the south of England are being moved to County Durham on false promises where the correct processes do not appear to be being followed.
“We are helping more people across a wide demographic area within the county who arrive with absolutely nothing but a list of support services that are already under pressure to ensure that the needs of local residents are met.
“We are currently investigating and gathering more evidence on this matter.”
Hounslow Council’s cabinet member for housing and homelessness management, Cllr Sue Sampson, said: “We cannot comment on individual cases but if issues are reported directly to the council we will endeavor to provide appropriate support.
“Alternatively, the person should contact the local police and support agencies in their new community.
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“Problems around property standards should be reported to their new landlord.”
Cllr James Rowlandson, Durham County Council’s cabinet member for resources, investment and assets, said: “While councils can place households in another local authority area, we believe it is not right to move someone over 250 miles in a new and unfamiliar location and without a support network.
“We will be contacting Hounslow Council to raise this matter and we will try to give this family the support they need, as we do in every case.”