Hopes that the credit crunch had halted a housing development on the edge of Oxford have been dashed.

Rumours had been rife that the 192-home Persimmon development, on the former Timbmet timber merchants site, on Cumnor Hill, might be mothballed after the housebuilder announced it was suspending work on most of its new developments because of the credit crunch.

Planning permission for the homes on the five hectare site was granted by the Vale of White Horse District Council in March, despite villagers' objections to the density of dwellings.

There are also fears that the sewer network cannot cope with more homes - with gardens in nearby Dean Court and North Hinksey previously flooding with sewage during heavy rain.

The village newsletter, Cumnor Parish News, had questioned whether work would still go ahead after Persimmon chairman Mike Killoran said the firm was postponing the commencement of new sites until the mortgage market improved.

Workmen were seen leaving the site in April.

Pat Mackin, who lives in Hurst Lane, said: "Everybody thought it might be on hold for a year or two at least, with the state of the economy.

"But the credit crunch obviously doesn't seem to affect Oxford as much.

"It is still a place where people want to live."

However, some residents will be relieved to see work start after concerns over safety issues on the site.

Since being vacated by Timbmet in January, young people have been seen spraying graffiti and smashing windows.

Vaughan Thompson, of Cumnor Hill, said: "The site has been a magnet for vandals already and the developers haven't been that quick at making the site more secure.

"The sooner they get on with it the better, because some young children might end up injuring themselves with all the glass lying around - or try to start fires.

"We're broadly in favour of the development, but the number of homes is way out of keeping with the rest of the area."

His wife Vanessa Cheel, said: "Persimmon needs to do something with the site because it is absolutely begging any young person to go in and have fun.

"But it is potentially very dangerous.

"Security is a very serious problem because of the size of the site.

"Kids can get access in many places."

Cumnor Parish Council chairman Philip Hawtin said: "We have seen intruders, mainly youngsters, on site and have contacted Persimmon Homes more than once to bring it to their attention."

Andrew Hammond managing director for Persimmon Homes Thames Valley, said: "Work is due to commence in July.

"Existing fencing has been added to the Cumnor Hill site and security is regularly reviewed in line with health and safety practices.

"If there is deemed to be an increased level of unauthorised access we will take the necessary action and this includes employing security guards.

"Oxford has always been a resilient property market. However given the current economic climate, our construction programme will be dictated by the rate if sale. We are, therefore, unable to predict a completion date."