Yes, that might be a violation of data protection law such as the DPA 2018 / UKGDPR, but not necessarily so. It depends on the details, for example on the purpose this camera serves.
Background on Fairhurst v Woodard and on legitimate interests
Fairhurst v Woodard is a significant case discussing implications of use of video surveillance outside of a commercial context, but it is a complex case due to the multitude of cameras involved and due to the somewhat unrelated privacy and harassment issues.
Point 135 is about the Driveway Camera, which only surveilled public property and the claimant's property, but did not view any part of the defendants property. People are free to surveil their own property, and would then be covered by the UKGDPR household exception. But for surveillance outside of their own property, defendant would have to comply with the DPA 2018 and the UKGDPR, for which defendant would have needed a legal basis.
The defendant argued that they had a legitimate interest (Art 6(1)(f) UKGDPR):
134. […] The Defendant submits that all his data collection and processing
was necessary for the purposes of crime prevention at his property and in
the car park
However, a legitimate interest always require as balancing test. The legitimate interest can be “overridden by the interests or fundamental rights and freedoms of the data subject” (Art 6(1)(f) UKGDPR). It is not necessary here that these interests, rights, and freedoms are explicitly enumerated in statutory law. Here, a right is claimed without supporting legal basis:
134. […] Claimant submits that her right to privacy in and
around her home overrides that purpose.
However, a possible basis for this claim would be Art 8(1) of the European Convention on Human Rights, which is part of UK constitutional law: “Everyone has the right to respect for his private and family life, his home and his correspondence.”
The court balances these rights and interests very differently for the different cameras. The Ring Doorbell is mainly focused on people who would ring the defendant's doorbell, and only incidentally captures passer-bys. Here, the legitimate interest was found to be valid. On the other hand, the Driveway Camera was mostly trained on claimant's property. Here, claimant's interests, rights, and freedoms override the claimed legitimate interests.
If the camera records the people living in the Green House when they go to or from their property, then yes, it seems like their rights would be affected.
But in your scenario, the context of the camera is not clear:
- Why was it installed? If the purpose is crime prevention, is there evidence of such crimes in the neighbourhood, or are the cameras intended to counter a speculative threat?
- What is its field of view? Is it mainly trained on the Yellow House's doorstep and only captures the street as a background, or does it focus on the street?
- Is the camera's field of view masked off as far as possible to exclude public spaces?
- Does the camera record continuously, or is it only activated for certain events like when a doorbell is rung or when someone enters the Yellow House property?
- Does the camera also record audio?
All of this is important because it factors into a legitimate interest balancing test. Maybe the Yellow House camera is more like the Ring Doorbell in the above case where the incidental capture of passer-bys was found to be acceptable, maybe it is more like the Driveway Camera that served no legitimate interest.
There is no absolute right to be free of all surveillance. Instead, the interests and rights of the Green and Yellow house residents must be balanced appropriately. Where there is surveillance, it must be limited to what is necessary.