Land values in Oxford are returning to near their peak according to a new report.

Research by the property firm Savills has revealed the city as a ‘leader’ in terms of the recovery in value of residential development land with greenfield values now just five per cent from their top value achieved in mid-2007.

It also shows that nationally average land value growth across all regions is being driven almost exclusively by activity in high value towns, with demand focused on readily developable land.

This is leading to deep divisions in values — for example, in Bradford, values are 69 per cent below peak.

Matthew Davis of Savills in Oxford said: “The Savills Land Value Index shows a remarkable bounce back in the Oxford area.

“With a strong housing market and a huge shortage of housing in Oxford, residential values fell far less than other areas during the recession, and began to recover earlier and quicker.

“As housebuilders recapitalise and begin to seek new opportunities again, Oxford is seen as a ‘safe haven’ for developers to spend their cash.

“Oxford has always been a competitive area for housebuilders, with much kudos being given to having your branded flags flying in this historic and very constrained location.

“This increased demand, coupled with limited supply, leads to a hot land market and high prices.”

Mr Davis said land prices are expected to level off in line with the predicted modest, but steady, growth in house prices in the area.

But he added: “With a finite land supply constrained by green belt, flood plain and the city boundaries, Oxford will continue to see a very competitive land market for some time to come.”