They are Soooooooo JEALOUS!!!!
Pure and simple. You have what I want, I want it, can't afford it, so I am going to make your life a misery.
The "we were here first" syndrome is also likely.
Best way to deal with it is to ignore it as best you can. When it gets bad, go to the door (as I did) and explain that I WILL NOT BE BULLIED!. I think saying the thing that is the elephant in the room might work.
It took 2 years of diplomacy to work for me, but now my eighbours are OK. Not great but a bit like the Peace Process!
PS - can you look into your heart and say that there is NOTHING wrong with what you did at the time? Sometimes people hate the shock of a wall or an extension in front of them if they don't know about it beforehand. etc. etc. I think we all have to work together.
If your neighbour had done the same thing to you, how would you have felt?
Oh dear,,,,, onwards and upwards.