In the design stage at the moment, thinking of trying to go for a 3 storey townhouse. From research it's cheaper to go up than outwards. 

 

Begs the question other than stairs, is there a reason why 3 storey houses aren't more popular?

 

are there additional planning issues? 

I think it will probably depend on where you are trying to build. Planners generally seem to like builds that look like the stuff next door. You probably wont be able to build significantly higher than the surrounding houses. How about a 2.5 story with a room-in-roof design for the top floor ?

You will need to take account of fire regulations in Part B.