A retired couple who offered the chance to win their £500,000 four-bedroom home and swimming pool with a £10 raffle ticket have had to close the competition with “sincere regret and upset”.

Robert and Avril Smith announced last year that they were hoping to sell 60,000 of the £10 tickets, giving the public a chance to win their home in Grosmont, North Yorkshire.

The winner was originally to be drawn on Thursday, but the couple said they were “back to square one” after being told by the Gambling Commission that it was not a legal prize competition.

The lounge of the house in Whitby. Photograph: @winayorkshirehome

They said they had already extended the draw date to August after the charity Cancer Research UK had agreed to help promote it in 2019, but found out just before Christmas they could not continue.

In a post on the website set up by the couple to administer the competition, they said: “It is with sincere regret and upset that this competition has to close.

“The Gambling Commission has deemed the competition a potential lottery and not a legal prize competition.

“We understand the disappointment to you all and can only apologise sincerely as well as offer a full refund.”

The £500,000 property also features a pool. Photograph: @winayorkshirehome

Last year, they said the home had an outdoor heated pool, log cabin, orangery and hot tub, but they wanted to move closer to their son in Harrogate.

They also hoped to raise up to £60,000 for Cancer Research UK through the sale.

Avril Smith had cancer 10 years ago and the couple also lost their daughter three years ago.

Her husband said on the website: “As you will have seen, my wife and I have been through a lot over the last three years and it was hoped that this would give us the break we need. Unfortunately, we are back to square one.”

On Thursday, Robert Smith said the Gambling Commission had been aware of the competition in July but only informed him of its decision a few days before Christmas.

He said: “This has been our worst Christmas in 48 years of marriage. But we’ve just got to try and pick ourselves up.”

He also said they were refunding more than 6,000 people who bought one or more tickets.

One of the bedrooms. Photograph: @winayorkshirehome

He said: “They will not lose out. The only losers are me, my wife and Cancer Research.”

He added that he would still be making a donation to the charity.

The couple criticised the Gambling Commission for not informing them sooner and also said the decision was contrary to the legal advice they had been given.

They said the house was open to offers in the normal way and ticket refunds could be claimed through the website.