Life

The Shady Business of Winning a House in a Raffle

Dozens of people have put a house up for raffle since 2017, with tickets costing as little as £2. But the scheme isn't as simple as it sounds.
20 July 2020, 8:30am
house-keys
Photo: VICE

Until this year, Jemma Nicklin hadn't won anything for 23 years. There was the time she nabbed tickets to see Future, but the gig was cancelled, so that doesn’t count. Then, on the 14th of February, 2020, after spending £4 on two of the 340,000 raffle tickets sold for Shrubbery Farm House in Longor, she won a house. To repeat: she won an actual house, worth £545,000. A building, where she could live, in a raffle, for only £4.

She tells me, "I was thinking it was impossible" – not to win a house, but to buy one – "especially if you are trying to do it by yourself.” Nicklin was earning £17,500 a year as an admin assistant when she won, with £1,000 in the help-to-buy ISA she’d recently opened. “When I was younger, I just pictured I’d grow up and move out by the time I was 21 or 22,” she says. Aged 23, Nicklin figured she had at least five more years of saving before she could maybe have just enough for a deposit, so she entered the raffle. "£2 – you would spend that on a sandwich. Why not a house?”

When Nicklin bought her two tickets, she had no idea that house raffles rarely sell enough tickets to actually raffle a house. Loquax, a competitions portal, lists 67 house raffles as having taken place since 2017, with ten competitions currently in progress. Previous raffles include places like Chuckle Manor, from TV show Chucklevision, raffled in 2019, to garden-variety four-bedroom semi-detached properties. All of this seems amazing on the surface – but is it? The concept of house raffling gets murkier the deeper you get. According to consumer website Which?, Nicklin was only the second ever person who entered a raffle to see their name on the deeds to a house.

In order to successfully raffle a house, the number of tickets sold should cover the cost of the property – for example, if a home is worth £545,000, the person raffling the house would expect to sell more than enough tickets to cover the cost of the property. Not enough tickets are sold in most cases, so many house raffles end with a cash prize being raffled instead of a property. Because house raffles aren’t regulated, this cash award is usually significantly less than the advertised property value.

In 2019, couple Mark and Sharon Beresford were accused of misleading entrants after they deducted £640,000 from the £750,000 prize pot of tickets raffled for their £3 million home in Hampshire, leaving winners with a cash prize of just £110,000, and no house (Mark Beresford said, "We calculated the prize exactly as described in the terms and conditions. In other cases, there’s not even a cash prize – sometimes tickets are refunded or the competition disappears entirely, along with the organiser and people’s money. House raffling is shady business.

This April, during the Coronavirus lockdown, Daniel Twenefour was reportedly the third person to ever successfully raffle a house in the UK. Before going ahead, Twenefour contacted people who had tried to raffle their house for advice. Twenefour tells me that only one person got back to him. “His advice was don’t do it, it’s an absolute nightmare.” The person refused to help because, “he was so determined that it wouldn’t work”.

But, surprisingly, the house raffle did work, and Twenefour sold £440K worth of tickets for his £400K property. From his research Twenefour learnt that raffles often fail because their chosen ‘payment gateway’ – the service that processes and authorises online payments – shuts the raffle down for being a gambling enterprise. That was something he was sure wouldn’t happen to him, but did, twice.

He tells me his success was largely down to the marketing of his raffle. “I marketed it as much as I could. Luckily for me, my wife is an influencer and she’s got friends that have a good following as well. In terms of the press, I just kept on knocking on doors until someone picked it up.” His raffle got featured in The Metro and 48 hours later he’d sold 100,000 tickets at £2 each. More coverage followed from The Mirror, LBC, The Daily Mail, and others, which he used to garner even more attention on social media.

Being one of the few people to have successfully raffled a house – making £40K more than the property’s value in the process – Twenefour has been inundated with requests for help from people looking to do the same. There have been so many requests he now intends to work with a house builder or private individual as a consultant to raffle off more houses. He says he has the expertise and the customer base needed to raffle a house. “I’ve got just below 30,000 [followers] on Instagram, 2000 on Twitter, and I’ve got my database [from my previous house raffle] on top of that as well.”

But is he not uncomfortable profiting from a housing market that prices young people out? “I think [raffles] are a way forward for young people that can’t save.” he says. “But don’t get me wrong – I am not somebody who is an advocate for gambling.”

The Gambling Commission is clear, house raffles have to be run as ‘competitions’, which don’t fall under the Gambling Act 2005. Competition must involve some skill, like answering a question tricky enough to “prevent a significant proportion of people from taking part”. Before Jemma Nicklin entered to win her house, she was asked, “What does AONB stand for?” and was given four options. If you don’t know, Google it, as everyone entering an online raffle would be able to do.

House raffles first became popular in 2008 when people were unable to sell their homes, due to the recession. Today, however, house raffles have become increasingly industrialised. Put together low homeownership rates among the young and record numbers of young people online gambling, and bam, you’ve got yourself a business. This might explain why some raffles seem to be set up with the aim of hopefully just giving away a cash prize to eager punters, rather than selling enough tickets to successfully raffle the house, while keeping some money from ticket sales in the process.

Dr Alison Wallace, a Research Fellow with the Centre for Housing Policy at York University, says these house raffles are symptomatic of people being priced out of the housing market. If the market is to be fixed it’s not going to be through a few people winning a house. Dr Wallace explains that we need to secure decent homes via social rented housing, as well as enhancing tenancy rights. She notes that we should be “building and renovating more homes across the country.”

But until that happens people will continue to enter house raffles. Zoë, who is twenty-two with no savings and an overdraft has entered three house raffles and won zero houses. She tells me: “No one is going to die and leave me money. It might change, but I can’t afford to save who-knows-how-much for a deposit.” Winning a house might seem like a remote possibility but so does buying one. For £2-10 people are entering house raffles because, why not? As Zoe says with a laugh, “I probably won’t win a raffle, but I definitely can’t buy a house.”

@JoshSchot