Oxford City Council has been urged to practise what it preaches after it left a house derelict for two years - while setting up a hotline urging people to report empty homes.

The council is increasing pressure on private landlords not to leave their properties vacant. It wants to take over empty houses to ease the city's homeless problem.

But residents in Charles Street, east Oxford, are angry that a council house in their street remains empty, more than two years after the last tenants moved out. Squatters have had to be moved out twice and residents frequently remove obscene graffiti from the walls.

They are so fed up they are offering to buy the house so they can clean it up.

Maureen O'Neill, who has lived in the street for nine years, said: "The council is being hypocritical. We were all very angry to hear about the hotline when we've had to suffer this in our street.

"People are fed up enough to put money into buying this house so we can clean it up. But we have had no response from the council.

"We are very neighbourly here. There are lots of families and a good cultural mix. The street is lively and friendly. But every time we open our front doors we see this rotting house."

The council has failed to renovate the house and re-let it because it claims it would be too expensive.

The council's housing director, David Magor, said: "It is a property that needs considerable expenditure, probably several thousands of pounds.

"We have a choice to make - we either spend the money or dispose of the property. We've decided to dispose of it to a short-life housing association to allow them to use it for homeless people."

An estimated 300 homes are empty in Oxford - of which 162 are owned by the city council.

Of that number, 30 are due for demolition, 44 need to be renovated, eight are fire-damaged, 50 are undergoing major repair works and 12 are being used temporarily.

More than 5,000 homes are lying unused countywide. About 4,000 people are currently on the city's housing waiting list.

Housing is at a premium in Oxfordshire, with the average house price being in excess of £160,000 - more than seven times the average wage.

The council has a policy of re-letting its own vacant properties as quickly as possible. The turnover time is currently four weeks.

Housing committee chairman David Connett has blamed a cash shortage for the council's failure to renovate many of its homes.

The council has raised £60m from council-house sales over the years, but Cllr Connett said Government rules mean the cash cannot be spent.

He added: "We were only given £4.5m in April by the Government for housing repairs. We need £18.5m to renovate all our houses. We cannot put families in houses that are unfit.

"As housing chairman, I have this money in the bank. But we cannot spend it."

Cllr Connett said it was unlikely the council would agree to sell the house in Charles Street.

"We would need approval from the Secretary of State to sell it for non-housing use. I don't think we would get it.

"I appreciate concern that the property is empty. But I would have to justify any sale to the people on the housing waiting list.

"If the council has an empty property, it may appear we are leaving it derelict, but actually our hands our tied," he said.

Despite having empty properties itself, the council still wants people to report derelict private homes on 01865 252696.