As in the title, I have been self emplyed for the last 5 years as a real estate developer in London. Would this be an issue when applying for an MBA course?

i think it shouldn't really be a problem, after all, there are many entrepreneurs out there going for an MBA. it is all a matter of how you present it in the application process(interview, forms, essays).
i think self employment tells a lot about a persons ability to do business and to think independently - and thous are exactly the kind of people b schools are interested in.

Thanks Andy.j . I believe the same I just fear that the good schools may want people from a corporate background.

Also what would be a good idea for references, perhaps clients I have worked for?

I'm not sure about that, especially when talking about MBA programs with focus on Entrepreneurship.

i think references from clients could be a good thing, especially if you did some work for established companies.