Property raffles began as an alternative way for homeowners who could not sell their property in a slowing market to raise the cash they needed to move on.
For entrants, a home is a tempting prize with tickets ranging from as little as £2 to £40 in some cases.
Many will be instinctively suspicious and the Gambling Commission and local councils have shut down around a dozen raffles after property owners failed to comply with regulations.
However, they keep coming, so should you try your luck?
A row of properties have come up as raffle prizes, including a £1.8 million Grade II listed mansion in Cheshire, a £600,000 cottage in Richmond, south-west London, and a £230,000 two-bed house in Southampton.
However, not every raffle has been a winner. Several have been abandoned because they did not raise enough funds. Typically they still hold a draw, with someone scooping whatever cash has been put in.
Others have been closed down, including one involving a £1.25 million five-bedroom home in Blackheath, south-east London, where the owner was hoping to sell 750,000 tickets at £5 each, with the aim of raising £3.75 million. Greenwich Council stepped in after spotting potential breaches of Gambling Commission rules and the raffle was cancelled, with ticket holders reimbursed through PayPal.
So far raffles have been one-off sales arranged by the homeowners, but now start-up property platform Raffle House is attempting to turn them into a regular thing.
Dating app developer Benno Spencer is offering people the opportunity to win a refurbished £650,000 flat in a converted period property in newly trendy Brixton, south London, with tickets costing just £5. Three runners-up will get prizes of £1,000 each.
Spencer said he has been working for nearly a year to ensure his raffles are legally watertight and it will go ahead on June 15 provided a minimum 150,000 tickets have been sold: “Entrants are about 1,000 times more likely to win this property than they are to get lucky in the Euromillions.”
Entry is open to all with tickets available at Raffle-House.com, although you first need to answer a simple multiple choice question to comply with gaming regulations.
Next up is a two-bedroom property in Whitechapel, east London, with more homes set to follow. Spencer added: “It has become basically impossible for young people to afford their own place in London. This is a fun and affordable way to do just that.”
The platform will cover stamp duty and give 5 per cent of its profits to a homelessness charity. If the threshold is not reached, the raffle winner will still walk away with the cash, after the platform’s costs and charitable donation have been deducted.
Given that you are putting up only a relatively small sum, the risks of entering these raffles are minimal. However, David Hollingworth, associate director at broker London & Country Mortgages, said it is not a viable way for existing homeowners to move up the property ladder: “This is purely a game of chance although it may appeal to some vendors who have been struggling to find a buyer.”
Paula Higgins, chief executive of the HomeOwners Alliance, said given the challenge of getting on the property ladder, especially for young people, it is not hard to see the attraction: “Bagging a home for the price of a meal deal is attractive, but while winning a house may be gimmicky, taking ownership needs to be taken seriously.”
North London estate agent Jeremy Leaf said one risk is that you might end up with a problem property on your hands: “If it needs a lot of work to put right, you may not feel so lucky after all.”
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