Housebuilder Taylor Wimpey (LON:TW.) has seen house prices in central London weaken recently.
In the heart of the capital, Zones 1 and 2, prices have softened slightly at the upper end during the last few months though demand remained high, the builder said.
Build costs are also causing a headache with skilled labour shortages likely to push them up by 3-4% during 2016.
Availability of labour had improved, said Taylor Wimpey, but not at the same pace as the increase in new home supply.
Otherwise, the company is set fair said Peter Redfern chief executive.
Margins will rise over the year compared to 2015 and the company remains on track to pay £450mln in dividends in 2017.
All targeted 2016 completions have been sold and 23% of the target for 2017, while the order book stands now at 8,981 (8,529) homes worth £2.3bn (£2.1 bn).