The Raffle House prize draw to win a London home continues to be delayed by several months after insufficient ticket sales – a problem that has dogged house raffles around the country.
Which? looks at what this signifies when you have already bought tickets, and whether house raffles are a good way to house-hunt or perhaps a waste of money.
Why has the house raffle draw been extended?
New property platform Raffle House continues to be selling tickets to win a one-bedroom flat in Brixton, for lb5 a ticket, for the past month or two.
The prize draw was originally set to occur at the end of June, but entrants were sent an e-mail today to see them that this has now been delayed until 25 November.
In to be able to sell the home and provide three runner-up prizes of lb1,000 each, Raffle House needs to sell 150,000 raffle tickets – which target has not been met.
The terms and conditions of the draw give Raffle House the authority to extend the date of the prize draw, so long as the brand new closing date is no after 6 months following the originally specified date.
CEO of Raffle House Benno Spencer told us that, as this is a new venture, there is going to become a period of time where Raffle House could be unclear about how long it might decide to try sell the requisite number of tickets.
He expressed confidence in selling enough tickets through the November deadline.
What when the tickets aren’t sold?
If, through the new closing date, the minimum number of entries isn't met, then the competition will close and there will still be a draw.
In this case, the chosen winner could receive a cash prize rather than the property. This is likely to be under the property value.
Alternatively, they might still receive the property, but with no ‘discretionary prize bonus’. This describes one more amount of as much as lb42,000 that may be paid out in the event that Stamp Duty Land Tax is payable by the winner.
In this scenario, the winner would need to pay the stamp duty on the property they’ve won.
According to the website, similar properties in the area have sold for between lb500,000 and lb600,000 – so, on the conservative estimate, you could be on the hook for approximately lb15,000 in stamp duty (or lb30,000 should you already own a home).
How often do house raffles fail?
There is really a lengthy good reputation for raffles in the united kingdom that have disappointed ticket buyers’ expectations.
A spot-the-ball competition in Berkshire for any lb3.5m home was withdrawn, and also the money refunded, after insufficient tickets were sold.
One raffle in Durham failed to sell 10,000 tickets at lb5 each for a lb43,000 property, and gave away a cash prize of lb7,000 instead.
While winners aren’t left empty-handed, taking home a significantly smaller cash prize isn't quite just like winning home of your dreams – plus some might not have entered whatsoever for this type of comparatively low winning.
What’s the way forward for housing raffles?
Property raffles are becoming increasingly popular, as numerous first-time buyers struggle to jump on the home ladder.
While it may be a chance to secure your dream home for just lb5, there are several companies falling foul of gambling rules – something the Gambling Commission has already expressed concern about.
In theory, if your raffle is withdrawn because of legal complications or failure to market tickets, you ought to be eligible for a refund of your money.
But be wary of unscrupulous operators who may disappear using the proceeds.
If you’re unsure whether you’d prefer to enter a property raffle later on, we’ve develop some tips to bear in mind.
While these aren’t regulations, they could enable you to decide whether to buy a ticket:
Aspiring to purchase a house?
If you're hoping to become a homeowner, a raffle could be a little bit of fun – however, you should continue saving for any deposit, and shop around to make sure you can secure the best mortgage deal.
Our guide for first-time buyers tells you everything you need to learn about saving a first deposit and applying for the first mortgage.