So presumably it is legal, I mean, to call them hobbit holes, not just houses with round doors and windows - or you can get permission to do it. I think they would have been closed down if not as the various Tolkien copyright holders are so forceful in protecting their rights
And a home made hobbit hole in someone's garden
Seems, it's larger that it looks from the outside:
Here is an example though of a proper home, constructed in the UK, and underground, not "hobbit like", no round windows etc, but shows you can get planning permission to build underground houses as in covered with Earth like a hobbit hole. They have conservatory windows all along the sunny side for energy conservation.
So, I'm sure it's possible. But in the UK, with all our planning regulations, I'm sure it would need a fair bit of discussion with planners. On the plus side, if it is presented as an "eco friendly" home, I understand that they are quite open to flexible discussions of new designs of house. You don't have the same regulations that you have for a conventional house, if it is built to be eco friendly from the get go with an innovative design. As these examples show.
Oh, here are a few more, rather hobbit like, near enough so you could imagine adapting them to look like a hobbit hole.
I haven't yet found an actual hobbit home though, in a short google search, constructed like the hobbit, with round doors, round windows etc, except for the ones for the film.
Has anyone built a house like this to actually live in, anyone know?
And this one, Low impact Hobbit house in West Wales, the io9 article says Simon Dale and his father-in-law are built this house in four months (1000-1500 working hours), from only $4600.