My neighbour called me sad

Pointing at the street (e.g. public property) = perfectly legal.

It's pointing at other people's private property which is the problem.
Yup

IIRC there is an exemption if it's unavoidable, but you should attempt to make sure it isn't done (and don't do it deliberately), and if you can apply privacy filters over things like windows.

We've got a couple of cameras, due to the fact we wanted them to cover our front path and drive it meant it was impossible to avoid having them facing the neighbours properties, however we made sure to select an appropriate focal length (so the neighbours houses are not "in focus" as much), and used the privacy settings in the cameras to blank out the windows.
We actually checked with them before we put the cameras up, and gave them a print out of what the cameras would see before we perminantly fixed the cameras.
So far the only time we've had any neighbour question them it's been along the lines of "did your camera manage to catch..." or "I don't suppose there is a chance you picked up on...".

The front path camera caught an utter idiot the other day trying to drive with what appears to be broken steering, it woke me up at about 2:30am as it sounded like someone was driving with brakes that were constantly screeching for several minutes, it turned out he drove into the street past our house, then turned around and drove back out again whilst one of his front wheels kept changing direction.
 
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