The raffle to win a house in south London has been delayed for a second time, meaning the prize draw will now take place at least a year later than first advertised.
Raffle House first launched tickets to win a one-bedroom flat in Brixton in April, and the winner was due to be announced at the end of June of this year.
However, the closing date has been significantly extended for a second time. A winner now won’t be drawn until 30 June 2019.
We explain what this means for those who’ve already bought tickets, and whether housing raffles are really a good way to find a home.
- If you’re saving for a home and want some advice on how to buy sooner, or schemes that could help, call Which? Mortgage Advisers for a free, friendly chat on 0800 197 8461 or fill out the form at the end of the article for a free callback.
Why has the house raffle draw been delayed again?
In an email to entrants sent on 20 November, Benno Spencer – the founder and CEO of Raffle House – explained that the company needs ‘a bit more time to sell the 150,000 tickets required to cover the property and its associated costs’.
The main prize is the London property, which Raffle House says is worth £650,000. There are also three £1,000 cash prizes for runners up.
Tickets are £5 each, and despite introducing offers giving away free tickets when people buy two or more, the company still hasn’t managed to shift the required number.
Those who bought tickets when the raffle was first launched would have been expecting to hear the result at the end of June 2018. But then the draw was delayed by five months, with a new date of November 2018.
Now, it’s been delayed by a further seven months until 30 June 2019.
The email says that Raffle House is ‘committed to awarding the property as the prize’ – and, as the terms and conditions state that the closing date can be extended at the organiser’s discretion, existing ticket holders will just have to wait until that can happen.
What happens if they still don’t sell enough tickets?
Usually, if the minimum number of entries isn’t met by the closing date, a draw will still take place but the prize value will be reduced.
According to the Raffle House terms and conditions, this eventuality would probably mean the winner would receive a cash prize instead of the property.
Alternatively, the winner could still get the property, but without the ‘discretionary prize bonus’. This refers to the additional sum of up to £42,000 that could be due if stamp duty is payable by the winner, plus a £3,000 cash lump sum to cover ground rent, council tax and utility bills, and up to £1,500 towards the winner’s legal fees.
In this scenario, the winner would have to pay stamp duty on the property they’ve won.
If the property was still worth £650,000 and the winner intended to use it as their main home, they’d have to pay £22,500; someone using the property as a buy-to-let or holiday home would pay £42,000.
The organisers still hope to sell enough tickets to be able to give away the property and cover the fees and prize bonus, too.
- Find out more: stamp duty calculator
Are housing raffles ever successful?
To our knowledge, no British property has ever been successfully sold via a raffle.
This is due to many early raffles being shut down by the Gambling Commission, and subsequent competitions being unable to sell the required amount of tickets.
If a housing raffle doesn’t sell the required number of tickets, the alternative cash prize can be worth significantly less than the property the winner was expecting.
The winner of one housing raffle in Durham received a cash prize of £7,000 rather than a £43,000 property – better than nothing, but not quite the same as winning a home.
A lack of tickets being sold also caused a spot-the-ball competition in Berkshire, which offered a £3.5m family home as the prize, to be withdrawn altogether. In this case, no one won the house or any cash and all money was refunded.
What’s the future of housing raffles?
If you’re tempted to enter one, be aware that some companies are running illegal competitions, sometimes pocketing the ticket money and closing down the competition without giving any sort of prizes.
We’d advise researching the listing, checking for additional costs and carefully reading the terms and conditions before buying tickets for a housing raffle.
For those thinking about selling their home through a raffle, the Gambling Commission has already expressed concern about members of the public choosing to raffle their properties without being aware of the laws surrounding it.
It is recommended that sellers take legal advice before choosing to sell a house this way.
Looking to buy a home?
Even if you’re in the early stages of saving for your first home, getting expert impartial advice can make the whole process much easier.
To get answers for even the simplest questions, and for advice on how much you need to save and the best schemes out there to help, you can call the friendly team at Which? Mortgage Advisers for free on 0800 197 8461 or fill in the form below for a free call back.
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