It is one of the possible qualifications. You also need to be over 18 and a citizen of the UK, an eligible commonwealth country, or an EU country (at least for now!). To meet locality requirements, you must satisfy at least one of the following four qualifications:
a. You are, and will continue to be, registered as a local government elector for the parish/community in which you wish to stand from the day of your nomination onwards.
b. You have occupied as owner or tenant any land or other premises in the parish/community area during the whole of the 12 months before the day of your nomination and the day of election.
c. Your main or only place of work during the 12 months prior to the day of your nomination and the day of election has been in the parish/community area.
d. You have lived in the parish/community area or within three miles of it during the whole of the 12 months before the day of your nomination and the day of election.
You can get fuller information from the Electoral Commission at
http://www.electoralcommission.org.uk/__data/assets/pdf_file/0003/141798/Part-1-Can-you-stand-for-election-P-and-C.pdf
