The gam­ble with hous­ing raffles

Can a new wave of housing lottery schemes make the fantasy of owning a home a reality?

It’s a bleak time for mil­len­ni­als in the UK. The gap between old­er and younger gen­er­a­tions has slow­ly but steadi­ly widened: young adults have less to spend on non-essen­tials than their old­er coun­ter­parts did, are less like­ly to own homes, and in fact are worse off in gen­er­al. 40% of young peo­ple are unable to afford even the cheap­est homes in their area – even if they have a 10% deposit. One in three will nev­er own a home at all. 

And as Keir Mil­burn writes in his book Gen­er­a­tion Left, the 2008 finan­cial cri­sis destroyed our aspi­ra­tions too. No longer do we feel as if our liv­ing stan­dards will improve – for our­selves or for our children.

Mean­while, we’re inun­dat­ed with columns, fea­tures and mon­ey diaries explain­ing that we could afford some­where if only we real­ly tried. Stop buy­ing cof­fee! Cycle every­where! Take your own lunch to work! Oh – and it helps if you also have incred­i­bly wealthy par­ents, too. 

It’s in this des­o­late land­scape that com­pa­nies have start­ed to promise us a route out of our cramped rent­ed flats, far from the whims of dodgy land­lords and safe­ly away from our jacked up, over­priced rent. But they’re not low­er­ing house prices, giv­ing us pay­ment plans or even offer­ing finan­cial advice – they’re hold­ing raffles.

House raf­fles” first emerged in the ear­ly 00s, with a crop of home­own­ers try­ing to flog their unsold homes via £5 or £10 tick­ets; more recent­ly, the enter­prise has pro­fes­sion­alised, with com­pa­nies set up with the express pur­pose of raf­fling homes. The com­pe­ti­tions oper­ate much like a nor­mal raf­fle: you buy a tick­et, nor­mal­ly priced between £10 and £20, and are entered into a draw with the pos­si­bil­i­ty of own­ing a new home. 

Raf­fle House, the most promi­nent of the com­pe­ti­tions, had a tempt­ing prize: a beau­ti­ful £650,000 flat in Brix­ton, plus enough mon­ey to cov­er stamp duty and oth­er ser­vice charges. It’s now offer­ing a sec­ond prop­er­ty, a two bed in Whitechapel, while anoth­er, Win­My­DreamHome, has also just launched, giv­ing away a £2.1m house in Ken­tish Town. 

Entrants know – as they do when they enter the Lot­tery, buy a scratch­card or engage in any oth­er kind of gam­bling – that their chances are slim. Indeed, Raf­fle House founder Ben­no Spencer cites a sta­tis­tic that claims 70% of the UK pub­lic enter the Lot­tery every week: from a con­sumer per­spec­tive, there’s huge demand for these types of com­pe­ti­tions,” he says.

But entrants may not be the typ­i­cal Lot­tery-play­ing demo­graph­ic that Spencer had in mind. I don’t enter a lot of com­pe­ti­tions, let alone buy tick­ets for them at cost,” Tom, 30, told me. He bought four tick­ets for Raf­fle House – one £10 tick­et, then three more at a dis­count­ed price when the com­pa­ny was try­ing to sell more. In all, he spent £20 on the com­pe­ti­tion (he didn’t win). 

I entered because I love Brix­ton – I used to rent there and am the clas­sic case of a mil­len­ni­al who can’t get a Lon­don deposit,” he says (he cur­rent­ly lives in Hamp­shire). So the home fac­tor had a par­tic­u­lar pull to me.” He doesn’t feel any par­tic­u­lar shame” in rent­ing – after all, more peo­ple are rent­ing than ever before. But Tom did want the oppor­tu­ni­ty to escape the rental mar­ket. It would be one less thing to wor­ry about.” 

He cites a heady mix of eco­nom­ic squeeze, high cost of liv­ing and greedy sell­ers” as the engine behind their ris­ing pop­u­lar­i­ty. It’s so obvi­ous that [some of the com­pa­nies] are using these meth­ods because they can’t hit ask­ing prices,” he says. This Brix­ton one, which was val­ued at £650,000 – it was prob­a­bly get­ting offers of clos­er to £550,000.”

But it’s risk averse – they can just… not give it away if the com­pe­ti­tion doesn’t sell enough tickets”. 

Sophie, 25, spent £15 on Raf­fle House entries for sim­i­lar rea­sons. Born in Lon­don, she realised any chance of stay­ing in the city would mean mov­ing way, way fur­ther out” than the area she grew up in: at the moment, she’s in Zone 5, and feels pushed out of a place she sees as a home. 

I do think the rise in their pop­u­lar­i­ty hints at the dif­fi­cul­ty of get­ting on the hous­ing lad­der,” she says. It def­i­nite­ly has got more dif­fi­cult.” She wouldn’t be sur­prised” if those run­ning the com­pe­ti­tions were being oppor­tunis­tic,” either: the com­pe­ti­tions being run now cer­tain­ly seem more pro­fes­sion­al and geared towards mak­ing lots of mon­ey than the fun’ type that appeared in the mid 2000s,” she says. I think that says a lot about the fact there’s a def­i­nite mar­ket being targeted.”

Both founders basi­cal­ly agree with this analy­sis (though not, pre­sum­ably, the idea that their endeav­ours are oppor­tunis­tic). Spencer cites his younger sib­lings and their own inabil­i­ty to get on the prop­er­ty lad­der as part of his inspi­ra­tion: the delta between earn­ings and prop­er­ty is just insane,” he says. There’s no way my sib­lings can afford a place in Lon­don.” Win­My­DreamHome founder Marc Ger­shon agrees that the prop­er­ty mar­ket has some­thing to do with it, though his focus is more on those who are not choos­ing not to buy in unsta­ble polit­i­cal and finan­cial cir­cum­stances, rather than those who are priced out of doing so altogether.

The hous­ing mar­ket is not as good as it could be,” he says. There’s a lot of uncer­tain­ty. And until peo­ple see more sta­bil­i­ty, they’re not nec­es­sar­i­ly com­mit­ting to buy.” 

Spencer notes that peo­ple aged between 20 and 40 (a group that could rough­ly be defined as mil­len­ni­als”) were the key demo­graph­ic” that emerged through focus test­ing, though says the company’s mar­ket­ing strat­e­gy focused on a wider age group. But tar­get­ed ads on Insta­gram and Face­book – which, anec­do­tal­ly, me and all of my late-twen­ties and ear­ly-thir­ties friends were absolute­ly bom­bard­ed with – seem to sug­gest that this priced out demo­graph­ic may be par­tic­u­lar­ly valu­able for the industry. 

Unsur­pris­ing­ly, nei­ther Spencer nor Ger­shon feel they’re monop­o­lis­ing on our anx­i­eties about our liv­ing con­di­tions. Ger­shon points to the wide age range of entrants (from 18 to 70, he says), whilst Spencer says that they nev­er try to freak peo­ple out about the fact they can’t own a home.” Whether peo­ple are enter­ing because they’re already freaked out is a dif­fer­ent – and unan­swered – question. 

The pair also point to their ded­i­ca­tion to char­i­ty dona­tion, with a por­tion of all tick­et sales going towards a good cause. But a spokesper­son from the Gam­bling Com­mis­sion not­ed that raf­fles and lot­ter­ies can only be run by good caus­es” to even pass legal muster – which makes their good­will look slight­ly less innocent. 

It’s also not always clear what com­pe­ti­tion entrants will actu­al­ly receive, even if they win. Raf­fle House tick­et sales fell short at 80,000, so the house remained unsold, the win­ner receiv­ing a cash prize instead.

This didn’t go down well with some entrants – Tom, in fact, even com­plained to the com­pa­ny. They’d delayed by a year because they hadn’t sold enough tick­ets, then mar­ket­ed the last few hun­dred or thou­sand tick­ets say­ing they’d almost reached their tar­get – total­ly aware they were giv­ing away a much reduced cash prize,” he says. They were total­ly mis­lead­ing in those last few months, because they knew we have 1000 tick­ets left to sell to win a £175,000 prize cheque’ wouldn’t sell and would under­mine the entire con­cept of a Raf­fle House’.” The company’s Insta­gram is lit­tered with aggriev­ed com­ments, with com­pa­ny respons­es to less angry com­menters some­what pas­sive-aggres­sive­ly thank­ing them for being one of the good ones” and being bet­ter, not bitter.” 

Whether these com­pe­ti­tions can ever actu­al­ly pro­vide us with homes is ques­tion­able (Which? says that it doesn’t know of a house that has been suc­cess­ful­ly sold in this man­ner). But their emer­gence in the mar­ket at this time is unde­ni­ably significant. 

If your wages are stag­nat­ing, your liv­ing costs are ris­ing and you don’t hap­pen to have par­ents who can give you a deposit, your chances of own­ing a home are slim; Oxford, Edin­burgh, Brighton and Leeds are all in the top ten most expen­sive cities in the UK, so the prob­lem is not iso­lat­ed to Lon­don, either. Many of us live in intol­er­a­ble con­di­tions – and even if we don’t, we still have to grap­ple with the fact that our land­lords are just get­ting rich­er, hap­pi­ly snuf­fling up half our salaries every month as we strug­gle. In these con­di­tions, who wouldn’t want to indulge in the fan­ta­sy of win­ning a dream home – or any home at all, in fact?

Once, a high-end car or beach hol­i­day would have seemed like the ulti­mate prize – unnec­es­sary lux­u­ries that we didn’t need, but want­ed nonethe­less. Priced out, ripped off, pre­car­i­ous: all we want now is some­where to live. 

Hol­i­day prizes seem so archa­ic now,” as Tom put it. We want a house!”. 

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