The £2k isn't some sort of compensation for having to live next door to someone having work done - thats like suggesting I pay her £5 ever time I play music too loud.
I have concluded she is a prick from her handling of this situation, I thought she was very nice previously.
You're the one calling her a prick.
How will she not be affected? Building work, drilling, banging, nailing, gluing, waste, etc.