Earlier this week, the council refused plans for the conversion of two penthouse apartments in Knightsbridge into a 10 bedroom property.
Planners said that "whilst it may be true that any individual unit of housing will inevitably represent only a small percentage of the entire housing stock in the City, the potential for numbers of similar cases coming forward and the potential cumulative impact of this on overall housing availability is considered to be a significant planning consequence".
A statement issued by the council following the refusal said that there have been over 200 similar applications in Westminster since 2013, leading to a potential loss of nearly 300 residential properties.
The statement said that the council intends to "strengthen planning policies on ‘super-sized’ housing" as part of an on-going review of its key City Plan planning document.
Westminster City Council cabinet member for planning and public realm, Daniel Astaire said: "This case raises issues which cut to the heart of our planning policy. It is unconscionable to accept this kind of proposal when we face a pressing housing shortage. In fact, it is the exact opposite of what we are trying to do."
"The council wants to create more housing. This kind of proposal means we have to run faster simply to stay still.
"Our aim is to ensure fairness and opportunity in housing and we refuse to sell golden postcodes to the highest bidder. For the future, we intend to strengthen our policy to prevent this kind of loss of homes in the city."
A spokesman for the council said that the changes would be introduced next year.