Traumatised Clare Happe, 32, today said she now wished she'd never bought the trendy unbranded scooter for her daughter Summer-Lily for £185 on Facebook.
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Clare and her partner Charlie Heatley, 25, forked out £555 for three identical hoverboards from the same seller.
Distraught Ms Happe said they'd lost everything in the terrifying New Year's Day inferno - and stressed they could easily have been killed.
Choking back tears, Clare, of Barking, Essex, said: "I can't believe it.
"To stand outside and watch everything you worked so hard for just go up in smoke was awful."
She said they now face being out of the house they were renting for more than three months with repairs set to hit at least £10,000.
The devastating late-night blaze seriously damaged all three bedrooms, ceilings, walls and floors.
"There was a loud explosive bang," said Clare.
"They [the children] all started screaming when I told them the house was on fire."
She said she'd been sleeping in one of the worst-hit bedrooms with her seven-month-old tot Charlie, named after her boyfriend, just 10 minutes before the fire erupted.
Firefighters dashed to the scene and took two hours to put out the blaze after Clare rang 999.
The mum-of-four said the shocking drama had shattered her oldest children, Taylor Dodd, 15, Harrison Happe, nine, and Summer-Lily Happe, seven.
"Harrison has been affected the most.
"He had to be sent home from school the other day due to anxiety," said Clare.
"This change has affected them very badly - they are all traumatised."
After sleeping in Dagenham's Premier Inn for four nights, the family have now been rehomed in Stratford, east London, by Southern Housing Group.
"It's been a struggle but it's better than a hostel," said Clare, who has lived in Barking almost four years.
"We're still in limbo though - we can't wait to go home.
"Poor Summer-Lily came out with just the clothes on her back.
"She lost all her toys and clothes and everything.
"She said to me: 'Mum, at least I've got you' - and that broke my heart."
Clare and Charlie, who are both jobless, have now thrown away identical hoverboards they gave to Taylor and Harrison for Christmas.
The furious couple have vowed to never again buy an electric item on Facebook.
"I totally regret buying them now. I just wanted the kids to have what other kids had so they didn't feel left out," said Clare.
"I just feel very sad though.
"Now they have nothing."
She said they aim to take legal action against the seller, who charged £185 for each hoverboard.
"We have lost everything in our home," said Clare.
"We want the seller to realise it could have been a lot worse - we could have lost our lives."
A London Fire Brigade spokesman confirmed the ferocious fire was sparked by "faulty electrical equipment".
The drama comes after hoverboards have been involved in a catalogue of safety scares over the last three years.
Mum-of-two Shannon Williams said that a hoverboard burned down her home in US capital Washington DC after they left the Christmas present plugged in and charging.
The US Consumer Product Safety Commission (CPSC) has launched an investigation into the accident as well as dozens of others blamed on hoverboards across the States.
The CPSC recalled more than 500,000 hoverboards last July after warning that their lithium-ion battery packs could overheat.
A string of international airlines have banned hoverboards from flights and the US Postal Service have stopped shipping the gadgets by air.