The country’s leading luxury house builder said it was on track to make another £1.5bn in pre-tax profit by April 2018.

But reservations are down 20% on this time last year despite site visitor levels and enquiries remaining at the same level as 2015.

Berkeley said: ‘What is increasingly clear is that Government policy, which has been helpful outside London, has had a negative effect on the capital.

“Transaction taxes are now too high and this is restricting both mobility in the second hand market and the pace of supply and delivery of new homes in London and the South East. 

“There is also a tension between the national policy on Starter Homes and the London Mayor’s ambition to build more affordable housing, while the very high rates of the Community Infrastructure Levy adopted by local authorities now pose a significant threat to development viability.

“While these challenges persist, and the barriers to entry for small builders remain high, London will fall well short of its targets for new homes.

“This is not just a problem for business and ordinary people in the capital but for the country as a whole.  

“London is the engine of our national economy and the principal driver of fiscal revenues.  

“So this is not just a question of housing Londoners – important though that is. It poses a risk to deficit reduction and the prosperity of the whole country.”