The raffle to win a property in Brixton has had its deadline extended by several months because insufficient tickets were sold, This is Money can reveal.
The sale, which started in April, was due to end by June 15, but will now be extended until November.
Earlier in the year, we revealed how Raffle House, a new platform to allow homeowners to sell tickets instead of their property, was selling tickets for £5 a pop to win the swanky London flat.
However, the draw date passed – and Raffle House told This is Money that it has extended the deadline to allow more time to sell the remaining tickets.
Benno Spencer: The founder of Raffle House remains upbeat about the venture
The property, said to be worth £650,000, needed a minimum of 150,000 tickets to have been sold by the closing date for the keys to be handed over.
It is not clear how far this target was missed as Raffle House didn’t divulge the information – but given the five-month extension, it is safe to say it could have been by a significant margin.
It prompts the question whether a house raffling platform is viable – and if Britons have the appetite to try and win a home in this fashion.
We also revealed earlier in the year that homeowners who raffle their properties instead of selling through an estate agent are failing to make enough cash from ticket sales to cover the value.
Furthermore, dozens of house raffles have been shut down by the Gambling Commission and local councils in recent times, after owners failed to comply with strict regulations.
Brixton: The home up for grabs is a one-bedroom flat in the trendy part of the capital
Entrepreneur Benno Spencer who created the platform said at the time that if not enough raffle tickets were sold for the one-bedroom flat, the winner would walk away with a cash prize.
The property has a spacious balcony, a large bedroom, open-plan living area and outdoor area. It also recently underwent a total renovation.
He told This is Money: ‘While not our desire, an extension was a possibility – this is a new industry and we are the first to look to seriously professionalise it.
‘Gauging demand and understanding timeframes was an important part of our learning process.
‘That being said, sales have been strong and consistent, showing that there is a real demand for truly alternative methods of getting on the housing ladder.’
We also asked whether the seller of the home was happy that the process had been delayed.
However, it transpires that the property is owned by Mr Spencer – information that was not given at the time of the launch.
He adds: ‘I’m the owner of this first property, meaning we can be as flexible as we need.
‘Traditional property deals tend to take months, so it’s fairly normal that this sort of thing takes time.
‘Raffle House’s plan is to start awarding a property every two months following the completion of this initial competition, at which point we’ll have finessed our processes.’
‘If we don’t sell the minimum required tickets – 150,000 – to award the property, then we will award a cash prize to the winner. However, we feel extremely confident that we will sell the required number.’
Win it: Raffle House originally had a deadline of 15 June to win this pad – but have extended it until November to generate more interest
Since the property was listed on Raffle House, there has been a slew of disappointing property price data.
Figures from Hometrack today indicate that house price growth in London has fallen to a nine-year low.
Benno said: ‘Our model is geared towards London property in the £500,000-£700,000 bracket.
‘In 2019 we are forecasting that we will scale into other big UK cities, such as Manchester and Birmingham while also maintaining competitions for properties in London.’
Struggles: Slow ticket sales suggest that perhaps people are losing interest in ‘winning’ a home
So, would it be easier to raffle a home in a location where prices are lower, therefore fewer tickets would need to be sold?
Benno adds: ‘We are always on the lookout for truly prize-worthy properties. Our mission is to see our customers win life-changing and incredible homes.
‘We have modelled our operations accordingly to enable us to offer high-quality homes and properties.’
To confirm their entry, players must answer a multiple-choice question correctly based on city population sizes within a time limit.
The team behind Raffle House said at the time of launch that it hopes to ‘fundamentally disrupt the property market and make home ownership a genuine possibility for all.’
However, there is no guarantee that someone who wins the property won’t already be a homeowner, as the raffle is open to all.
If 150,000 tickets are sold and the keys handed over, Benno says stamp duty will also be taken care of by Raffle House.
It says it will make profit via any excess accrued from the total number of tickets sold with 150,000 for this Brixton property the target needed to break even.