We know raffles aren’t betting for various legal reasons, and we know that the odds are long. But there is an important shift happening in the property market at the moment.
The glory days of flipping a house every two years when your mortgage discount period ends for a 25% profit are over.
Poor Millenials will probably never see property growth like that again, but there has been a growing trend for property sellers to try and raffle their houses.
One property raffle site that stands out is Raffle House, where you can win a house from a £5er, so we had a quick chat with CEO Benno Spencer to find out what all the fuss what about…
What did you do before Raffle House and what was the incentive for setting it up?
I’ve spent most of my career working in the city but about two years ago I started a dating app. I’ve always wanted to be self-employed, I’ve always loved property and Raffle House is a great business in an emerging industry – it ticks lots of my boxes as well as our customers, so it’s a win-win.
Historically, there have been legal issues with raffle sites charging for entry to win big prizes. How have you addressed this and do you think the regulator or rules will change in the future?
Our model has been approved by specialised lawyers and we conducted focus group research prior to launching, testing a number of our game mechanic hypothesises.
We are a prize competition and abide by Gambling Commission legislation – our model was built around it – and should the rules change in the future, we look forward to remaining compliant and being a part of those conversations.
The Raffle House crowdfunding campaign on Seedrs is nearly completed. Have you had many raffle customers invest and what are your plans post raise?
Yes, we’re now 99% funded, which is really exciting. Unfortunately, and hopefully for obvious reasons, anyone connected to the business, such as an investor, cannot take part in any of our competitions.
Once we’re fully funded, we’ll focus on advertising the current competition and we have some great content we’re looking forward to pushing out on TV and through digital mediums. It’s all been working towards awarding this property in November and then scaling our business.
Your CPA is particularly low at the moment! Why do you think that is and do you think it will rise with scale?
That’s right – it currently costs us about £1 to acquire a user, with users buying two £5 tickets on average. I think that part of the reason is that people genuinely love what we offer – we merge two normally discrete markets, property and gambling and there’s huge demand for both.
Our media buying team is confident that as we scale, the CPA will remain roughly where it is. However, we’re a cautious company and have modelled for a much higher CPA; it’s fantastic where it is but we’re also prepared for it to climb.
You’re partnered with eMoov – is that important for the business?
We’re proud to have teamed up with eMoov, one the UK’s most disruptive property agents. As an early-stage company, we recognise that partners will help to strengthen brand awareness as well as push organic ticket sales.
That’s why, while eMoov is our first recognised partner, we expect to have more to announce in the coming weeks and months. We are talking with other disruptive estate agents as well gambling industry and prop tech leaders.
What’s the ultimate goal? How many houses do you hope to be raffling this time next year?
This time next year we hope to be awarding three properties a month. We aim to maintain a focus on London but also potentially branch out to other UK cities, like Manchester and Birmingham. In a few months, we’ll also introduce Rent Raffles – where for, say, 50p our customers can win their rent for a year. We’ll also likely bring forward development of our app, and we hope to release that early next year too.
And finally, who lives in the properties whilst they are being raffled off?
The current property is actually mine and I’m living there!
Our next engaged seller also currently lives at the property we’re going to market on their behalf. In that respect, I suppose it’s a pretty similar experience to selling one’s property through the more usual channels except we guarantee a price, pay the seller if we fail to sell their property and aim to conclude the whole process in a couple of months.