All tickets sold in a lottery must be sold at the same price and have an equal chance of winning a prize. (So, for example, it's unlawful to sell tickets at "25p each or a strip of five for a pound"). Tickets won't have an equal chance of winning a prize if they become invalidated when their purchaser has already been awarded a prize, so your current way of doing things is clearly unlawful. (It would also appear to breach general contract law too).
Have you got a licence to run your 'community raffle'? You require a licence to run a raffle unless it's incidental to an event (e.g. at a fete or dance, where tickets are only sold at the event and not elsewhere), restricted to members of a society (or those on the society's premises), restricted to customers of a business (where tickets are only sold on those business premises), restricted to people in a common workplace or restricted to people living at the same premises.