Fire crews have managed to contain the head of a blaze that is burning out of control in the West Australian Shire of Gingin.

The fire started in the Ocean Farms estate in Lancelin, about 120 kilometres north of Perth.

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The Department of Fire and Emergency Services (DFES) downgraded the alert level for the fire to a Watch and Act, but said there was still a possible threat to lives and homes as conditions are changing.

It warned residents in the area they need to either leave or get ready to actively defend their homes.