Small groups of houses, apparently now in the middle of nowwhere , are characteristic of all the North Pennines, because of their mining history. Some of those in County Durham are still very much communities, but the ones higher up the dales tend to have been abandoned.
I have been looking at maps and our 1940s book on Teesdale. The latter mentions "the houses at Balderhead", so obviously a small community still there at that time. In Lunedale, besides Lune Head, the current OS map shows farms at Lane Head and Beck Head, very close to each other. they are above the reservoir, There may have been other houses, now under the reservoir.
However, what really came up trumps was the "Keys to the Past" website of Durham County Council. Put Lunedale into their "search records" and there are all the listed buildings and historical features including a photo of the 19th century miners' cottages at Lune Head. There will also be entries for Balderdale, Cotherstone and Romaldkirk, so you might find some other possibilities.