Annie, you can install a wood-burner in your chimneyless house, you cut through the wall,usually just above the stove and lead the flue up the outside wall. Where any part of the flue is within contact range it will carry extra insulation. You don't need forced extraction, coz heat rises and as long as you have the angles you'll be fine.
I wonder if your neighbour's rig has been OK'd by the insurance company coz it seems a bit dodgy to me.If it's a go for you ,do it properly ,so that if you ever sell it will be an add-on .