If you had previously applied and been rejected by Oxford I would usually suggest that you go to KCL, or Nottingham, or wherever, and not re-apply to Oxford. But in your circumstances, not having applied before, I can't see any harm in giving Oxford a go if your grades come out as at least AAA, so long as (1) you have a viable plan for a gap year that does not only involve applying to universities, and (2) you have a Plan B, accepting the risk that you won't obtain an offer from Oxford. Disregard the suggestion above that would you need more than AAA to be a competitive candidate for Oxford.
Please don't fret about university rankings, as they have no relevance outside places such as TSR. Thus, if you decide not to try for Oxford, or you try and Oxford says no, and you would still prefer not to study in London, there are as you know lots of good universities up and down the country where you could have an intellectually rewarding time and plenty of fun.
Good luck!