Julie, I can't agree with you that, as the letter is merely an acknowledgment 
of receipt of Mr Y's letter, it doesn't constitute Mr X's personal data. 

The ICO's post-Durant (and more relevantly, post-Article 29 working party 
Opinion on personal data) states that: 

"Where data is not ‘obviously about’ an identifiable individual the following 
question may help to determine whether the data is ‘personal data’.
Is the data being processed, or could it easily be processed, to:
- learn;
- record; or
- decide
something about an identifiable individual,
as an incidental consequence of the processing, either:
- could you learn or record something about an identifiable individual; or
- could the processing have an impact on, or affect, an identifiable individual?"

In this instance the data is processed, or certainly could be, as a bare 
minimum to record that Mr X had been the subject of a letter, received by the 
data controller (and presumably of some relevance to the controller, otherwise 
why would it be on file) written by his neighbour Mr Y.

Unless I am missing something in al these Xs and Ys.

best wishes

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