The building of new houses in the countryside around Warwick and Leamington Spa is to be restricted.
Warwick District Council says it will refuse any more large-scale building plans following concerns from residents that the area is being over-developed.
Labour group leader, Bob Crowther, said it was in line with national policy to encourage living in major urban areas.
The managing director of Rugby-based Domus Estates, Bill Lloyd, has warned there would be pressure on prices.
Mr Crowther said: "It follows regional and national policy that we should be concentrating on upgrading and encouraging people to live in the major urban areas, rather than building houses over vast swathes of countryside."
Mr Lloyd said: "There are still people coming into the area. There are still jobs being created in the area.
"If they restrict supply and the demand continues to be high or continues at the same rate, then unfortunately there's only one thing that can happen and that is pressure on prices."