Property prize draws claim to offer a way out of the UK’s housing crisis. They’re not what they seem.

JULY 30, 2024

Win a £750,000 three-bedroom property in London for just £11: With a “spectacular open-plan living area,” a “state-of-the-art kitchen,” and “beautiful fixtures and fittings,” it was, according to Better Chances, a housing competition in the United Kingdom, “no ordinary house.”

Sandy Chamberlain, 62, first saw the competition advertised on Facebook. Over four months, beginning in January 2021, she entered 35 times. In May, concerned about the competition’s legitimacy, Chamberlain asked to tour the property. The home was real — she remembers it as “a perfect size” for her and her husband Tony — however, it was in Borehamwood, a town 15 miles from the City of London, not the area that Better Chances had advertised nor a place she had envisioned living in. A few months later, Better Chances announced Chamberlain had won the competition. She did not receive the house, but £2,749 instead.

Prize draws like Better Chances sell a dream, a way out of the UK’s escalating housing crisis. To buy a ticket is to imagine living comfortably, if not extravagantly. However, winning a home is rare, sparking inquiries into whether the competitions are riddled with deceptive practices and possible fraud: Since 2017, more than 370 house competitions in the UK have offered citizens the chance to win properties valued as high as £5 million, but only 34.7 percent have resulted in the winner receiving a property. Built on a foundation of crafty fine print and enabled by poor government regulation, housing prize draws allow organizers to profit from false hope and the promise of stability.

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Property competitions have been around in the UK since the early 2000s but gained popularity in 2017. That year, Marie Segar, a finance worker, won a six-bedroom 18th-century country home in Lancashire worth £800,000 after purchasing 20 tickets for £40. The couple conducting the competition sold almost 450,000 tickets for £2 each, walking away with a sold home and a surplus of cash. Since Segar won, for-profit start-ups run by entrepreneurs and property developers have flooded the housing competition market.

A quarter of private renters spend more than 40 percent of their income on rent, compared to nine percent in France and five percent in Germany.

Thousands, if not hundreds of thousands, typically enter each competition, according to statistics from Loquax, a community website that refers to itself as the UK’s oldest online competition portal. Almost one in four Britons have taken part in a housing draw, amounting to £860 million in ticket purchases across the country per year. This is more than the total spent on charitable lotteries, according to a 2022 survey conducted by Jumbo Interactive, a digital lottery firm that owns and manages some lotteries in the UK. One in 10 Britons have gone into debt to participate in prize draws, according to a 2021 consumer study of 4,000 UK residents by the same firm.

Unlike lotteries, which require a license to run and are illegal for private gain, prize draws and competitions are unregulated in the UK. Property contests that offer a free entry route or require a skills-based test are not subject to gambling regulatory oversight, and players are therefore unprotected. Some companies advertise that they will donate part of the ticket sales to charity, however, according to the UK Gambling Commission, there “may be no independent oversight to ensure that the proceeds reach the intended recipient.” Prize draws and competitions “now operate online in ways which could not have been foreseen,” the UK Department for Culture, Media, and Sport stated in a policy paper published last year, and they take advantage of an expensive housing market.

England is “the most difficult place to find a home in the developed world,” a report by the Home Builders Federation has claimed. A quarter of private renters spend more than 40 percent of their income on rent, compared to nine percent in France and five percent in Germany. Chamberlain, who recently retired, rents a three-bedroom apartment for £1,970 per month. Her husband, a manager at HP, earns six figures, more than three times the average UK salary, but they say they still cannot afford a mortgage in Reading, the town they currently live and want to stay in. “Owning is about security. I don’t want to win prizes. I want to win a house I can live in,” Chamberlain said. “Rent is a money pit.”

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The closing date for Better Chances’s three-bedroom “London” property was September 16, 2021, yet a winner was not announced. Three weeks later, Chamberlain inquired about the winner over email; eight days later, Better Chances told her that her ticket, number H-5684145, the last to be bought in the competition, had won, but that she would be receiving a cash prize instead of the house.

According to the terms and conditions of the competition, if an insufficient number of tickets were sold, the winner would receive 50 percent of the ticket proceeds excluding the processing fee. There are “many varieties” of prize competitions explained Andrew Tait, a gaming lawyer based in Gibraltar, a UK territory, some of which are run within the boundaries of unregulated prize competitions and others that will be commercially aggressive and test, in Tait’s words, the “definition of free entry.” “The 50 percent payout if insufficient tickets are sold will be more likely to fall into the latter class,” he said, describing property draws and competitions as “a legal construct to circumvent gambling regulation.”

These competitions, he told me, are “a bit like a tax on hope.”

Chamberlain’s winnings were not 50 percent of the sales. Tickets were advertised at £11 and therefore Chamberlin’s prize suggests that Better Chances sold 549.8 tickets, an unexplained decimal, and received £6,047.80 in payments. But a week before the closing date, a notice on the website stated that 118,051 of the 120,000 tickets remained, which indicates that at least 1,949 tickets had been sold, equating to £19,490 in sales excluding the processing fee. According to these calculations, the prize should have been £9,745, almost four times larger than the £2,749 Chamberlain received.

This was not the first time Better Chances did not grant a property. In 2019, the company listed the same three-bedroom house also for £11 per ticket. Anton Williams, the competition winner, received £8,373.50. When asked whether they were misleading contestants, Alexios Konstantinidis, one of two Better Chances founders, told me over email that they did not have “any plans to deceive anyone or mislead anyone. Everything was clearly stated always and we made sure we communicated at all times by announcing everything.” Konstantinidis said they are still paying back loans they took out to run the business.

Nick Mooney, 42, enters “most” property competitions in the UK — buying between £10 and £30 worth of tickets per draw. He currently rents a semi-detached property in the southeast of England and aspires to own a house. “I’ve won a few small prizes,” he said. “But, like most people who enter lotteries and prize draws, I am running at a net loss.” These competitions, he told me, are “a bit like a tax on hope.”

Chamberlain told me she has entered “too many” competitions “to calculate.” In the past, if she liked the house, she would spend at least £300, “minimum.” Until recently, the retiree, who does not “play poker or anything like that,” paid for monthly subscriptions to several house draws, which gave her a set number of entries per month and additional subscriber-only competitions. She also bought individual tickets. She once spent over £1,000 on a single draw. Of the competitions that Chamberlain has participated in, some did not even award a cash prize.

In the autumn of 2017, Chamberlain entered a competition to win a five-bedroom £3.5 million New England-style home named Reve House. The home boasted a wine cellar, a 3D cinema, a formal dining room and river views, with private mooring. It was located on the banks of the Thames, only a mile from where she lives. Chamberlain bought 14 tickets at £25.25. She even engaged in direct messages with the homeowner and raffle organizer, Gary Weller, who designed and built the property with his wife, Helen. In December, the couple invited Chamberlain and her husband for gin, and they soon became friends, drinking cocktails at the Reve House and meeting up for coffee.

On March 28, 2018, the competition ended. However, according to Loquax, “Reve House … completely went off radar without announcing a winner.” Loquax claims that their website was removed, the Facebook page was deleted and the Twitter updates stopped. Chamberlain also said the website and Facebook page disappeared. In October 2018, following an investigation by the UK’s advertising regulator, the Council of the Advertising Standards Authority (ASA), ruled that “Reve House had not awarded the prize as described, or a reasonable equivalent,” however, they did not mention the removal of the site or social platforms. An estimated 50,000 tickets were sold, amounting to at least £1.25 million, according to Loquax. The ASA told Reve House to “ensure” future competitions “awarded the prize described in the ad, or a reasonable equivalent.” “Unfortunately for disgruntled entrants Reve House’s owners got a slap on the wrist,” Loquax wrote at the time. (The Wellers refused to comment for this article.)

For the 34.7 percent of competition winners who do receive a home, maintaining a luxury property can prove costly. According to the Southwark Council, the inner London borough, a homeowner should expect to spend between one and four percent of the value of their property each year, not accounting for services such as heating, caretaking or grounds maintenance. By this measure, a property valued at £3.5 million, such as Reve House, would cost between £35,000 and £140,000 in upkeep per year. While some competitions offer a cash prize in addition to the home, David Adams, a London-based luxury property expert, said that many winners cannot afford to keep the property.

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Housing competitions have drawn criticism for some time. In 2017, PayPal banned organizers from using its service for ticket sales, stating that “these prize draws carry considerable risks.” The following year Emmaus UK, a charity working to end homelessness, refused to accept donations from Raffle House, a prize draw provider, based on its “commitment to ethical fundraising.” “As a charity we are committed to ensuring we feel comfortable with the origins of any money we receive, and on this occasion felt it necessary to decline the donation,” the head of Communications & Fundraising, Helen Brandley, told UK Fundraising, a news site for professional charity fundraisers.

Sellers, too, find the system opaque. In June 2022, Declan Garrett listed his four-bedroom £350,000 family home in Somerset for £3 a ticket after being refused a new mortgage. The physics teacher wanted to upsize, but with seven children between him and his wife, the amount they could borrow was reduced by 70 percent. He aimed to sell 300,000 tickets and receive £600,000 after paying his outstanding mortgage and the acquired fees. He used a third-party property draw company called Raffique for the competition. If the allotted 300,000 tickets were sold, the winner would receive the house, Garret would take 90 percent of the ticket sales and Raffique would take 10 percent. If the ticket sales were not reached, the winner would receive 75 percent of the ticket sales, Garrett would take nothing and Raffique would receive 25 percent.

In particular, the report pointed to competitions offering discount incentives for buying tickets in larger quantities, which encourage people to join quickly and spend more.

Garrett and his wife, Leoni Webb, spent four months promoting the prize. In October 2022, the week before the competition closed, the BBC covered the story, spotlighting the draw: “Weston home raffled for £3 after owners’ mortgage refusal,” read the headline. Garrett told me that people couldn’t access the website: thousands commented on the BBC’s Facebook page, where the story had been promoted and Garrett received messages of complaints via the house draw’s social media promotion. “That happened a few times,” he explained, “whenever we got any substantial press.” The contest fell short: only 19,680 tickets were sold. Raffique pocketed an estimated £15,000. (Raffique, which shut down shortly after the competition ended, did not respond to a request for comment.) “They have no incentive to push [ticket sales] over because they actually end up with more [money]” if the threshold is not reached, said Garrett, who still lives in the same home. “We felt a bit tricked. They took the money that we promoted for them.”

House draws can also capitalize on plagued developments. Adams, the luxury property expert, believes that homes purchased specifically for prize draws often have an issue: “The developer has built something and hasn’t been able to sell it.” In June 2021, a company called Omaze awarded a house in the Cotswolds thought to be worth £2.5 million. Yet because the property was located next to a stream at the bottom of a valley, it was prone to a high level of flooding and had been on the market for two years, a person living in the area, who requested to remain anonymous, told me. “The winners were worried about the flooding. [The owners] were really quite happy to get rid of it.” James Oakes, the Chief International Officer at Omaze, told me the property was secured “against future extreme weather events before the winner took ownership.”

In a paper published in April 2023, the Gambling Commission, which is responsible for regulating gambling and is funded by the UK’s Department for Culture, Media and Sport (DCMS), proposed to regulate the sector. In particular, the report pointed to competitions offering discount incentives for buying tickets in larger quantities, which encourage people to join quickly and spend more. “There are no restrictions on when or to whom these adverts are directed, and no easy way for consumers to block them,” the government agency explained. Mark Griffith, a professor and psychiatrist who specializes in gambling disorders, told me these competitions would not be attractive to a “problem gambler.” “However, this doesn’t mean to say that people can’t spend a lot of money,” he said.

The policy could change under a new Labour government, which was elected on the 4th of July. (The party’s election manifesto promised to proceed with the Conservative Party’s reforms to the gambling sector.)

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Chamberlain told me that she has given up on property competitions for the most part. Using her husband’s credit card one evening last year, she entered a Facebook competition to win a three-bedroom detached house worth £217,500. Around 7 a.m. the following morning the bank alerted Chamberlain’s husband to six attempts at fraudulent activity. An illegitimate company had convincingly imitated Northern Ireland’s leading independent bookmaker, Tommy French. “Watch out for these scam pages,” Tommy French posted to Facebook in November 2023, adding: “There’s no way to completely stop them, all businesses are being hit. The only advice Facebook gives us is to keep blocking them as we get them.” (Tommy French declined to comment.)

The houses are either a “scam” or “over the top,” Chamberlain said. The 62-year-old prioritizes competitions with a cash prize. “My husband and I would buy this property,” she said, referring to her current rental of six years, where she has painted, sourced the lighting and paid for custom-made furniture. A removal van sits outside her neighbour’s flat. The couple next door can no longer afford the rent on their home of nine years. When housing is a lottery, a place to live is the greatest prize.