Painted houses, owned, can be any colour the owners like, unless it's listed and/or in a conservation area.
I can't believe that the only thing in your life you have to grump about is the colour of the neighbour's house!
I totally understand that not everyone likes coloured houses and you don't like the blue on theirs, fair enough, BUT, I agree with your neighbour. I also LOVE coloured houses like those in Blackpool, etc.
How can you report them just for having a coloured house?! Even if the entire thing, roof included, was painted Mr Blobby style or Minions or Smurfs, whatever, then just because you don't like the colour, you have no right at all to try to report.
I personally can't abide boring beige, blinding white, etc., but I wouldn't report you or come to your door to moan about the colour of your house!
GOOD ON YOUR NEIGHBOUR is what I say!