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If the CCTV camera is being used to protect the neighbour's home, as opposed to spying on others, then it is likely to be allowed.
Private use of cameras to protect a home from burglary, for example, are excluded from regulation.
However, you can complain to the Information Commissioner if you feel the cameras are being unlawfully used, and the police if you feel that they're being used to cause harassment or alarm to you.
There is a useful factsheet from the information commissioners office here: http://www.ico.gov.uk/for_the_public/topic_specific_guides/cctv.aspx