Oxford City Council delivers good' strategic housing services with excellent prospects for improvement', according to a report published by the Audit Commission.
On a scale of one to three, Audit Commission inspectors gave the service a two-star, or 'good', rating.
The inspection said the council was successfully improving conditions in privately rented housing, reducing homelessness and delivering a high number of good quality affordable homes.
Effective steps had also been taken to support vulnerable people living at home.
However, the report found there was scope to strengthen the approach to diversity and value for money.
Audit Commission housing inspector for the South East Sára Kulay said: "Strong collaborative work with partners has helped the council deliver a high number of good quality affordable homes and improve the conditions of private rented accommodation."
The report recommended the council use customer feedback to improve services and engage more effectively with private sector landlords.
The council is one of the least affordable districts in the South East and homelessness is among the highest in the region.
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