In the guidance notes https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/830643/190910_Tech_Guide_for_publishing.pdf the last point (any statement) says that, "If any part of the building, container or enclosure is within 2 metres of the boundary of the
curtilage of the house, then the height limit for the total development is restricted to 2.5
metres if it is to be permitted development." This means that regardless of slope, if you build within 2 meters of the boundary there is a restrictive height limitation otherwise you could end up with this scenario.
The limit on height of structures is height from ground level where it is constructed, not from the ground level of surrounding properties. If ground has been levellled to form a terrace there is nothing that I am aware of which changes that rule.
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“Raised” - In relation to a platform means a platform with a height greater than 0.3 metres.
https://planning.merton.gov.uk/MVM.DMS/Planning Application/1000111000/1000111875/20P3043_Decision Notice.pdf
https://planning.merton.gov.uk/MVM.DMS/Planning Application/1000111000/1000111875/20P3043 Site Photo.pdf