Newham is to become the first borough in the country to license all private landlords.

Newham councillors have approved the scheme – covering an estimated 35,000 private tenancies – one in three of all the borough’s households.

The licensing programme is due to come into force on 1 January, 2013. Private landlords will pay £150 for a five year licence if they register before 1 January, 2013. Otherwise the full fee is £500. Landlords who fail to license face fines of up to £20,000.

The radical move comes after the borough announced the creation of a task force to combat ‘sheds with beds’ – illegal buildings built at the bottom of gardens which often house tenants exploited by landlords.

The scheme is backed by national housing charity Shelter which has urged other councils to follow Newham’s lead.

It has been piloted on a small scale in the borough’s Little Ilford Neighbourhood Improvement Zone (NIZ). The pilot scheme achieved 100% compliance following enforcement action against a small number of non-compliant landlords.

Newham Mayor Sir Robin Wales said: “We want to ensure that private sector rented properties are well managed and meet a good standard. We also want to deal with the crime and anti-social behaviour that is sometimes associated with bad private sector rented housing.”

Kay Boycott, director of communications, policy and campaigns at Shelter, said: “We urge other local councils to follow Newham’s lead in sending a clear signal that enforcing the law against rogue landlords is a priority.”