What does this phrase mean: "the person in the house next to mine"?

[SimonT]

Test No. errors/elem-5 "Relative Pronouns", question 9

The person in the house next to mine knows someone which met the Queen.

(a) mine
(b) which
(c) the

Test No. errors/elem-5 "Relative Pronouns", answer 9

The person in the house next to mine knows someone who met the Queen.

Correct entry: who
The error was: (b) which
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I can't understand why there is "next to mine".
Can I say "next to me"?

[Alan]

Mine is a possessive pronoun like yours, theirs .. and means the one belonging to me. The house next to mine means the house next to my house.
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