Yes, of course it does. Their heating bills are all up because they have an exposed, and probably poorly insulated, constantly cooling wall they have to heat up.
It might not be illegal.
It is also pretty shitty to the neighborhood.
[edit] this struck a nerve, immoral behaviour getting called out really annoys people.
If the neighbours want absolutely no heat escaping, they need better insulation. Similarly, if grandparent wants less than 19°C, he needs better insulation himself, or he needs an air conditioner. Everyone stands to lose in this situation, but GP just happened to found a sensible balance that works for him and saves him money.
And I would be pissed too, but I can't blame them. The issue here is clearly lack of insulation.
The construction of the building and their neighbor’s energy usage are not their problems to fix or be blamed for.