In the two and a half years since the first edition appeared (April 2005), events have unfolded as predicted. Then the consensus among forecasters was that the boom in house prices would cool to an annual 2 or 3% rise over the following years. In fact, in keeping with the ‘winner’s curse’ phase of the cycle described by the author, prices rose by more than 10% per annum in Britain.

Harrison’s first book, The Power in the Land, predicted the early 1990s recession. Boom Bust, warned that investing in property is not always a safe bet, because the housing market is subject to a sharp downturn at the end of a remarkably regular 18-year cycle. The crash of 2007/8 occurred exactly as predicted. His forecast was based on a careful study of the evidence from property markets in many countries over the last 200 years. Gordon Brown’s claim, last made in his 2007 Budget speech, that ‘we will never return to the old boom and bust’ has been proved false.

The reason for the instability, Harrison explains, is not the housing market itself but the land market on which all buildings stand. Land is in fixed supply – as Mark Twain noted: ‘They’re not making any more of it’. Therefore, as the demand for land for new homes and offices rises with population growth and economic expansion, market forces, which normally increase supply to reduce prices, have the reverse effect: prices rise. This encourages speculation, with banks lending more against escalating asset values and reinforcing the upward spiral.

Under existing government policies, the only way land prices can be brought back to affordable levels is a slump, undermining the banking system and causing widespread unemployment and repossessions. This is exactly what happened in America with the collapse of the sub-prime mortgage market. The run on Northern Rock showed the UK economy is not immune.

The author reveals that the government’s monetary policy only has a marginal impact on land speculation, but as the Bank of England raises interest rates to curb house price inflation, the main victim is the first-time buyer and the productive economy, especially small businesses. The only way to neutralise the boom bust cycle in the housing market is through a reform of taxation, he claims.

“This book is an important contribution to an overdue debate.” Martin Ricketts, Chairman of the Academic Advisory Council of the Institute of Economic Affairs and Professor of Economic Organisation, University of Buckingham. Endorsing the thrust of Harrison’s argument, Prof. Ricketts goes on to acknowledge “that insufficient attention has been given by policymakers to the rent of land as socially the most efficient source of public revenue”, and that that will “have important practical consequences … for the stability of the economic system”. Economic stability is the objective of Gordon Brown and most governments around the world. Harrison explains how this may be achieved.


Author Details
Fred Harrison is Executive Director for the Land Research Trust. He studied economics at Oxford, first at Ruskin College and then at University College, where he read Philosophy, Politics and Economics. His MSc is from the University of London. He cut short a career as an investigative journalist in Fleet Street and embarked on a 10-year sojourn in Russia, following the collapse of communism, acting as an advisor to a number of Russian academic and political bodies, including the Duma (parliament), in order to help the Russian people avoid the economics favoured by rent-seekers.

You can read more about Fred Harrison on his author page.
Visit Fred’s Blog.
View Fred’s YouTube channel – Geophilos.


“Fred Harrison, one of the few people to warn of the impending crisis, argues here that, though eliminating the damaging swings of the business cycle has been the dream of finance ministers for the last sixty years, they have failed and will continue to fail because they ignore the importance of land in a market economy. The book suggests that taxes on income should be abolished and replaced with a land tax, as this prevents speculation on the easy profits of owning land (which causes a boom).”
New Classics

“Fred Harrison’s book is nothing short of excellent. Until we realize that land is a national rather than a purely private asset, we are likely to continue the current application of taxation and thus follow the ‘boom bust’ path.”
The Professional Insurance Broker

“In 2005 Harrison published Boom Bust, warning that the property market is subject to a sharp downturn at the end of a regular 18-year cycle, based on his study of UK property markets over the last 200 years. The UK housing market started collapsing in November 2007, followed by the recession Harrison had forecast.”
Michael Hudson, Professor of Economics, University of Missouri.

“Fred Harrison’s ‘Boom Bust’ would be on my list of ‘must read’ books.”
Irish Mortgage Brokers Blog

“Boom Bust should be compulsory reading for all those in the Treasury and particularly Gordon Brown.”
Mark Dampier, The Independent

“The man who predicted the property crash.”
Ross Clark, Spectator

“…those warnings were not of the ‘boy who cried wolf’ variety, but well thought out and calculated.”
Marc Coleman, Irish Independent

“[Harrison] does make a case for the existence of an 18-year business cycle, which he links to speculation in the property market.”
Samuel Brittan, Financial Times

“… there are some fascinating insights into cycles, property and rents.”
John Calverley, Economic Affairs

“… for anyone seeking to understand the vagaries of the housing market, this is a fascinating read.”
Jeff Howell, Sunday Telegraph

“The man who predicted today’s housing woes – ten years ago … does Harrison really know something we don’t?”
Ross Clark, Mail on Sunday

“In 2005, he published Boom Bust: House Prices, Banking and the Depression of 2010, in which he successfully forecast the 2007 peak in house prices and ensuing depression.” The full interview with Ed Magnus is available here: (Financial Website of the Year and part of the Daily Mail Group)