Does the landlord have to ask you if it's ok to apply to build a house on his own property?
Er...yes, he does. It's not "his" property while he has a tenant there. That's what a tenancy means. When he grants a tenancy (which includes the garden) then he is handing over the right to the tenant to treat it as their own while the tenancy is in existence. He can't do anything that impacts the right to peaceful enjoyment while the tenancy is in place.
It's odd that landlords (and most MNers) seem to think that the LL is really just doing the tenant a favour letting them live in "their" property in return for rent. This is not the case. The property is the tenants while the tenancy is in place - the LL just retains the right to take it back under certain very strict conditions.
OP - ignore most of the comments here. Not only should the LL have spoken to you, he requires your permission while your tenancy is in place to make any changes at all. It's not actually his garden at the moment, it's yours.
He's breaking the law - and this could be regarded as harassment and at odds with his responsibility to allow you the right to quiet enjoyment as a tenant.
It's up to you what you do. Do you want a house in YOUR garden that YOU pay rent for? Is he going to reduce the rent you pay to reflect that you no longer have the right to quiet enjoyment in your own garden?
He's got a flaming cheek, quite frankly.