Developers and home owners would be allowed to extend the height of properties without planning permission, under plans being considered for the budget by the Chancellor.

Philip Hammond is weighing up proposals to relax planning laws to enable houses and blocks of flats to be raised to the height of the tallest building or tree in the same area without the cost or delay of seeking council approval.

The "build up not out" plan, which is backed by several former ministers, together with David Cameron's ex policy chief, is being pushed by MPs as a way to help solve the housing crisis without building on greenfield land.

It mirrors similar proposals originally made by Sajid Javid, the Communities Secretary, and George Osborne, Mr Hammond's predecessor, for homes in London, and offers a solution to an impasse between the Treasury and No 10 over proposals by the Chancellor to relax rules restricting construction on the green belt.

A housing white paper published by Mr Javid in February proposed to "offer scope to extend buildings upwards in urban areas by making good use of the ‘airspace’ above them".

The plan now being considered by Mr Hammond would involve extending the "permitted development" scheme under which parliament grants a general planning permission for certain types of work, meaning specific approval is not required from local authorities each time.