Musings of a London Property Finder
As would-be vendors struggle to sell their properties an increasing number of people are thinking up diverse ways to part with their homes while making a profit despite the financial turmoil and barely a month goes by before we hear of another property raffle.
The latest to be publicised in London is a block of 11 flats in Whitechapel, finished to a high standard and worth £8 million and with an annual rental income of £500,000 according to the website. The development which is due to be finished in December has been planned with a high spec finish with each apartment including a steam room and stone worktops. According to house price websites such as ourproperty.co.uk, houses in the same street sold for £325,000 in July last year, so it is difficult to see where the £8 million valuation comes from. However, given that the entry to this raffle is free with the purchase of £60 MP4 player, even with a valuation of £250,000 for the 1 bedroom flats and £300,000 for the 2 bedroom flats producing a total value of over £3 million, the lucky winner may well think that a £60 flutter is money well spent.
The owners, developers MIA want to net in the region of £7 million from the scheme but have pledged to do a cash draw instead if sufficient funds are not raised, so in essence all purchasers could win something. To date there are just over two thousand entrants but the developers have the option of extending the deadline from 2nd March by 3 months if they haven’t issued 200,000 tickets in that time.
On the face of it, this scheme may work where others have failed in view of the necessity of buying the MP4 player. OldboroughRetreat, the million poundhome withcourse fishing lake, woodland and 4 fishing lodges was offered earlier this year for £25 a ticket however it attracted the attentions of the Gambling Commission and the draw has been postponed on the grounds that the offer may constitute a lottery and the owners do not hold the required licence. Other than that, it seemed to be a successful draw with the property attracting enough interest: 46,000 tickets were sold according to the website – but since no winner has been drawn, you will have to take the vendors word for it!
Tom Kavannagh, Chief Executive of the Gambling Commission has warned homeowners and buyers to steer well-clear of such schemes saying:
“The Commission has been keeping a close eye on the recent developments with such house competitions and warns potential organisers to take note of its guidance and to take independent legal advice before proceeding,”.
Competitions which involve an element of skill which are not regulated by statute. If not they are classed as lotteries, the Commission warned.
Under current legislation prize competitions are free of statutory control if they require an element of skill which would “either deter a significant proportion of potential entrants from participating or eliminate a significant proportion who do enter”. If not, they are classed as lotteries.
“Homeowners considering such schemes as an alternative to selling their house risk committing a criminal offence if they cross the boundary and stray into offering an illegal lottery. Lotteries are the preserve of good causes and cannot be operated for private gain,” he added.
The advice has to be don’t do it, or if you do, be aware that the properties auctioned are likely to be advertised with an inflated valuation and there is no guarantee that a valid legal draw will take place or that entrants will get their money back if that happens. One of the draws we have found on a quick web search below does not appear to have any terms and conditions advertised – so there is no clear indication what happens to funds raised if only a fraction of thousands of tickets are sold. There is little doubt that many vendors act in good faith but inevitably this property phenomenon will also attract shysters.
A quick web search brought up the following property draws which are all current. We will look at them again after they have finished and try and establish if any result in a happy gambler in a new home.
- www.sprialsight.co.uk - a competition to win a 3 bedroom modern house in Telford, purchased for £149,995 in 2004 according to comparison site our property. The entry fee is £15, the closing date is the 15th of May 2009 and there are 187 entrants to date with a maximum number of 14,700 entrants.
- http://www.myhideawayinspain.com/odds.html -150 Euros or 60 Euros for tickets with multiple chances of winning studios, flats or villas in Spain. The tickets are issued with vouchers which can be used as part-payment for a stay in one of the boutique hotels owned by the company. It would appear that English law doesn’t apply.
- http://www.prizeofalifetime.com/faqs.htm – The chance to win on of 2 houses in Norfolk for a £25 ticket and completion of a sudoku game. The competition closes on Valentines Day but there doesn’t appear to be any sign of how many people have entered so far, how many entries are required or any link to the terms and conditions.
- http://www.winadevelopment.com/terms.asp - Possibility of winning apartments in Devon for a £50 ticket, however the question asked is very simple so may not fulfil the Gambling Commission rules above and after a month on sale only 10% of the required 45,000 tickets have been sold. The closing date is the end of December with an option for the operators to extend by 2 months if all the tickets haven’t sold.
This London Property Finder recommends property from genuine sources only!
Tags: bargain property, London Property Finder, property competition, property giveaway, property giveaways, Property raffle, win my home