Waterhouses was originally a collection of three farmhouses but the original Waterhouse, now gone, was named because of it's location near the river. The village of Waterhouses grew in size when the first pit of Waterhouses Colliery opened in 1855. Waterhouses Colliery was developed by the Pease family who went on to build a new railway line called the Dearness Railway, it officially opened in 1858 and commenced at Waterhouses. The whole railway now forms the Deerness Valley Walk which can be located nearby, great for walkers and cyclists.