Oxford has become the first city to license all shared houses in a bid to tackle rogue landlords and troublesome tenants.

The £3.7m city council scheme, which comes into force this week, will require landlords of houses of multiple occupation (HMO) to meet set standards if they want to rent out their properties.

Housing officers say it will combat unfit living conditions and problems for neighbours such as garden rubbish.

But landlords claim only responsible owners will comply with the scheme and “cowboys” will find ways to fly under the council’s radar.

One in five city residents live in a shared house and a 2005 survey revealed that 70 per cent of Oxford's HMOs were “unsafe”.

Council officers get more than 2,000 complaints a year about HMOs.

Joe McManners, the city council’s executive member for housing, said standards were an ongoing issue and many homes were poorly managed.

He said: “The private rented sector is hugely important to the residents of Oxford, not just in terms of providing much needed accommodation, but also with the impact that it can have on local communities.

“Licensing every HMO will help drive up standards for everyone.”

The scheme will be financed through fees, ranging from £362 for smaller properties to £500-plus for larger houses. Affecting more than 4,000 properties, it will be introduced in two phases.

From this week, landlords of three-storey houses and those with five or more tenants will need to apply for a licence. Smaller HMOs will require a licence from January 2012.

Three-storey homes with more than five tenants have required a licence since 2006.

Landlords who fail to comply could face additional charges, or lose their licence.

Letting agent Jan Bartlett, of East Oxford-based Premier Lettings, agreed with the aim of the scheme but warned it should cover all rented homes.

She said: “It will be the good landlords who will fork out the fees. There will be dodgy landlords who think the council will be so busy dealing with the goody-goodies that it will take years to catch up with them.

“I don’t believe this will catch the real cowboys.”

The scheme was delayed and amended last year after landlords threatened legal action over when each phase is introduced.

Oxford City Council is also backing a High Court challenge to the Government's decision to revoke the need for planning permission to convert a house into a HMO.

The council says the power is needed to help limit HMO numbers.