A Victorian terrace on a tranquil street in cosmopolitan Kensington, within walking distance of the city centre, universities, museums and the historic waterfront, is on sale for £1. What's the catch?

The fact it is not in London's most expensive borough (average house price: £1.478m), but in burgeoning Liverpool is certainly not a catch in my eyes. Liverpool city council plans to offer 20 derelict homes in Kensington, Granby and Picton for £1 each, but there will be some basic rules to stop this latest attempt at regeneration being abused. Buyers must show they are capable of doing the house up to a reasonable standard and will have to sign an agreement to live in the property for five years and not sublet it.

I can barely put up a picture hook, but I reckon I could cobble together some savings to pay someone to do up the house. Joining the rush of 200 people in less than 24 hours who have called the council about the homes for a quid, I phone them to see if I'm eligible. Does it count against me that I am not a local?

"We want to keep communities together, but a lot of what we are doing in Liverpool is attracting new people into the community," says Damian Richards-Clarke of the city council. Best of all, he thinks, "you won't need 10 grand lying around" to do up the house. The details are still to be finalised – the council is set to approve the proposals on Friday and people must wait until May to apply – but there may be an opportunity for potential residents to take advantage of cheap loans to turn the derelict shells into homes.

What about Kensington itself? Ex-footballer Phil Thompson, screenwriter Terence Davies and David Morrissey grew up here, but four years ago a police report identified more murders and attempted murders and gun crime in Kensington than any other part of Liverpool, although crime is falling. "Cosmopolitan is the word," says Richards-Clarke. "It's a good, diverse mix of people and it's on the fringes of the city centre, which has had a huge amount of investment."

Even with a five-year residency rule, such a bargain looks ripe for exploitation: what's to stop me using it as a second home or quietly letting it out? "There's always this danger but it's either that or do nothing and leave these homes to rot," says Richards-Clarke. And the council's housing officers could be deployed to ensure the scheme is not exploited.

If the 20 homes for £1 scheme is successful, the council may consider extending it to more of the 179 derelict homes it owns. Another scheme will allow a housing provider to do them up and then sell them for 25% less than the market rate. This has already brought 250 homes back into use in other parts of the city.

I won't be moving to Liverpool but I hope those who really need it – the homeless families living in B&Bs and people in need of a clean break – get a home for a quid and Kensington rises again.