Things to Think About #18 - Houses in Balham, Feeding the Elderly in South Korea, and Writing with AI
Balham is the epitome of gentrification in South London. It has a Tube station, plenty of pleasant greenery, lovely terraced housing and, of course, a plethora of coffee shops, bars, restaurants and bakeries. There is a Gail’s, obviously, though Hildreth Street is arguably ground zero for hipster eateries and bars. Every weekend, people queue for brunch and flat whites in the morning, returning in the evening for a table in one of the same street’s bars and restaurants.
Last weekend, my wife and I—and our 10-month-old daughter—joined the fray at Utter Waffle, though we had booked in advance. It is one of the many upscale brunch places du jour vying for attention in London’s crowded restaurant scene. We have been to its Herne Hill branch and are pleased that it has opened in Balham, closer to where we live. This is not an ode to Utter Waffle, mind, though the waffles were excellent. Instead, it is a reflection on London’s property market through the lens of Balham.
As we walked around the area waiting for our reservation, we stopped at an estate agent’s window and found ourselves looking at a display consisting entirely of houses on sale for more than £1.5m. In fact, that was the lower end of the range, with many properties listed at £2m–£2.5m, or even £3m. Now, I want to be clear about one thing. These were very nice terraced and semi-detached houses that would make fine homes for even the most discerning families. Balham is also a pleasant place, with all the amenities a high-income London family could possibly want, and then some. Finally, this is London: there are more people with more money than you think in this city. That is precisely why estate agents display these kinds of properties in desirable areas, sometimes at prices far above those we saw in Balham.
Still, it made me wonder who might be buying such properties in the current environment, with mortgage rates pushing 6%, the rich and wealthy groaning at Labour’s now annual tax-hiking rituals, and a pervasive sense of gloom in London’s property market, particularly at the prime end.
Roughly speaking, we can think of three groups of prospective buyers for a £2m house in Balham. First, there are cash buyers. My guess is that many sellers of Balham’s finer properties are hoping one of those will emerge to meet their asking price. That said, cash buyers are currently spoilt for choice in London’s high-end market, where prices are falling faster than anywhere else. For someone selling a prime property in Balham, this raises the question of why a cash buyer would venture all the way down the Northern Line, pleasant as the area is, when she could buy a discounted property closer to the city centre in an equally attractive, if not nicer, neighbourhood.
Then there are second-steppers who have sold an existing property at a gain and have a substantial pile of cash to put towards their next purchase. Finally, there are first-time buyers, though these seem unlikely candidates unless they combine a very high income with an equally impressive savings rate, or have access to an extremely well-capitalised bank of mum and dad.
It is worth scrutinising the economics facing these latter two groups: buyers who need a mortgage. Second-steppers are typically young families selling a flat to buy a house. The chances of finding such a buyer for a £2m onward purchase look slim in London at the moment, given the desperate state of the flat market, bogged down by cladding uncertainty, rising service charges and ground rents.
Even for buyers backed by mum and dad, the monthly outgoings on a £2m house would leave the most resilient HENRY gasping for air. First, they would need to come up with at least £250,000–£300,000 in cash for the deposit and stamp duty. Then there is the mortgage. Rightmove’s calculator puts the monthly repayment on a £1.8m mortgage at an interest rate of 5.4% over 30 years at just over £10,000. That is before council tax, utilities, insurance, any mansion tax, and the cost of putting the little ones into one of the area’s undoubtedly pricey private nurseries.
London has plenty of people with high incomes, but this is thin-air territory all the same.
This brings me to a hypothesis about London’s property market, and perhaps the market more generally. How do we reconcile the obvious difficulties facing sellers with the increasingly loud calls from property experts for them to wake up, smell the coffee and price more realistically? Perhaps this is less a buyer’s market than a “chancer’s market”. The distinction, as I see it, turns on whether sellers need to sell or would simply like to.
My guess is that the owners of the houses in that Balham window fall firmly into the latter group. They would quite like to sell, but they do not strictly need to. They also know that they are fishing in a thinly populated pond and are hoping that someone will turn up eventually. After all, they only need one buyer. More straightforwardly, if they had to sell quickly, they would have to price much lower.
I suspect this is a broader tendency across the capital’s property market, especially now that the supply of new-build properties has collapsed, providing some cushion, however small, for existing home prices. Many households would like to sell, and some may be increasingly desperate to move so they can upsize or downsize. But they do not strictly need to sell for financial reasons.
Put in economic terms; the cost of waiting for an offer at their current asking price is not yet high enough to persuade them to cut aggressively, despite experts’ arguments that a more realistic initial price might ultimately secure a better result. This is precisely the sort of market that could produce a sustained but slow fall in prices, as sellers gradually chase buyers’ willingness to pay downwards, rather than a collapse.
How to feed an ageing population in South Korea?
A recent short study from the Korea Institute for Industrial Economics and Trade examines the changing nutritional needs and food preferences of an ageing population, and whether markets and public institutions can respond. It caught my eye because I am currently organising and rewriting my demographics chapters—with some help from AI, as I discuss below—with the aim of producing a first draft of a book. Specifically, I have recently returned to my notes and writing on mortality, in which nutrition plays a key role, at least according to some studies.
And so we turn to South Korea. Just as Japan now uses more diapers and incontinence pads for adults than for babies, rapid population ageing is reshaping demand in South Korea. In this case, it is creating a greater need for “care food”: products adapted to older people’s nutritional requirements and difficulties with chewing, swallowing or digestion. The paper argues that this demographic shift offers growth potential, but that existing market arrangements are unlikely to deliver the required improvements in provision without government support.
The industry serves both individuals living at home and institutions providing meals to older people. Although large food companies have entered the sector, care food represents only a small part of their business. Companies dependent on it are mainly smaller enterprises, many struggling with uncertain demand and weak profitability. Low consumer awareness, resistance to products labelled “senior-friendly”, and competition from ordinary meals and nutritional supplements constrain retail sales.
Institutional supply could provide a more reliable revenue base, but the author identifies a mismatch between production costs and purchasing budgets. Meals incorporating certified care-food products reportedly cost upwards of KRW 5,000, while local governments and welfare institutions budget KRW 4,000–4,500. Specialised processing raises costs, while constrained budgets and residents’ limited willingness or ability to pay discourage facilities from purchasing these products. Manufacturers also appear to favour relatively expensive products poorly suited to institutional buyers.
The proposed policy response combines demand development with changes to institutional provision. Immediate priorities include consumer education, trial vouchers and better market statistics. Longer-term measures include adjusting Long-Term Care Insurance payments and enabling facilities to use frozen or partially prepared meals produced in specialist plants. Automation and personalised nutrition could improve productivity and service quality. The author warns that inadequate support could drive smaller suppliers out, leaving the market concentrated among large corporate groups.
This is a good example of how population ageing changes market dynamics, and an interesting case study of South Korea’s care industry. That said, the study leaves many questions unanswered. It does not establish whether weak profitability reflects market failure, inappropriate product choices, insufficient public budgets or some combination of the three. Nor does it demonstrate that specialised meals generate benefits sufficient to justify their additional cost—a central premise of the argument. The suggestion that better nutrition would reduce future healthcare and care expenditure is plausible, but the study does not establish this decisively for South Korea or more generally.
The evidence also rests partly on industry interviews, dated consumer-awareness data and uncertain market-size estimates. Consequently, the paper offers a useful diagnosis of potential bottlenecks rather than a rigorous assessment of the case for intervention. Its broader insight is that ageing increases social need without necessarily creating effective commercial demand.
AI and writing
Writing is perhaps one of the most controversial uses of AI, despite being a task to which an LLM is well suited. The two most common objections are that AI creates “slop” and that it detaches writers from the final product—who is actually writing it, in the end?—while ultimately dulling the skills of those who rely too heavily on it. Both concerns can be valid, but it would be a stretch to treat either as a general rule.
I am currently rewriting my notes and essays on demographics with the aim of finally producing a first draft of a book. AI has been a fantastic tool for synthesising and organising my thoughts, and for suggesting where sections or arguments need beefing up. The experience has broadened my thinking about AI and writing by showing me that it can be a two-way process. AI can act as your editor, or you can act as the editor of its output. Both approaches have the potential to make writing more productive and efficient.
I know what the naysayers will say: they will never read anything wholly or partly generated by AI, and I am diluting my end product. I don’t believe either claim, for my sins. Onwards!