Parents who bought flats for their student children last year have seen prices in Oxford soar by 25 per cent, according to an Oxford estate agent.

Richard Thomas, of Knight Frank, said that although rental yields had fallen as a result of an oversupply of rented homes, Cherie Blair was part of a growing trend of parents buying flats for children.

In its annual review of the property market, Knight Frank says that its own research supports the Land Registry's 25 per cent figure for the city.

A national report by website Rightmove said on December 16 that property prices in London had fallen by 2.6 per cent over the past month.

But Mr Thomas said he had seen no sign of a drop in prices in Oxfordshire.

Last year, prices rose by 13.45 per cent in Oxfordshire as a whole.

Although first-time buyers were being forced out into the periphery of the city, Mr Thomas said central and north Oxford had an enduring appeal.

He said: "Strong demand emanates from the international schools and colleges, as well as from parents of students seeking an alternative form of secure investment while their offspring complete their studies."

The city's importance as an academic centre, plus its efficient local public transport system and good road and rail links, ensured that there was a constant demand for homes, which had not been matched by an increase in supply.