The Collins family move into Brookside Close after Paul's redundancy has forced them to downscale. On moving in, they find that their home has been vandalised, and Paul immediately suspects the son of their new neighbours, the Grants.
The Collins give the Grants a lift to church after Bobby's car breaks down. Roger has still to get to know any of the neighbours, but is caught spying on them, and turning off his car alarm with only a newspaper for modesty.
Paul registers for benefit, Lucy struggles at the local comprehensive school, realising that her posh voice and background will be a disadvantage. Barry has a dodgy suggestion for Annabelle.
Roger tries to assemble a shelving unit, despite having not enough screws and no instructions. Bobby plans a strike at work, and there are cookers on the move on the Close.
Paul's digging amuses Damon and his friends. Barry tells a horrific tale of an accident on the building site. Karen brings home her new boyfriend, Demon Duane.
Heather wonders why Paul is always at home, Roger is becoming agitated about the cookers in the next garden, Karen's period starts, and a strike looks imminent.
New neighbours arrive in a large frozen meat truck. Karen wants to persuade Bobby and Sheila to allow her to go on holiday, and Heather gets her revenge on Roger.
Barry makes Duane understand that boasting about his "conquest" of Karen was really not a very good idea. Meanwhile, Lucy is being physically intimidated at school.
The whole close is burgled. Despite Petra working for an insurance company, her house contents are not covered. Lucy exacts retribution upon her tormentor at school.
Lucy is rescued from a kiss under the mistletoe by one of her class-mates. Karen wants to go to a party instead of attending the midnight Mass. Derek makes a pass at Heather.
It is an upsetting Christmas for the Collins family, while Karen has a hangover, Bobby has an emergency meeting, Roger's burglar alarm goes off again, and Damon has no presents.
The Grants invite all their neighbours to their New Year's Eve party. Roger and Heather return home, and discover that their alarm has been tampered with, and Gavin has erected a multicoloured shed to house his cookers.