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The story revolves around three families in England at the beginning of the 20th century: the Wilcoxes, rich capitalists with a fortune made in the Colonies; the half-German Schlegel siblings (Margaret, Tibby, and Helen), whose cultural pursuits have much in common with the real-life Bloomsbury Group; and the Basts, an impoverished young couple from a lower-middle-class background. The idealistically motivated, well read, highly intelligent Schlegel sisters seek to help the struggling Basts, wishing at the same time to rid the Wilcoxes of some of their deep-seated social and economic prejudices.
The Schlegels had briefly met and befriended the Wilcoxes when both families were hiking in Germany. Helen, the youngest daughter, is romantically attracted to the younger Wilcox son, Paul; they get engaged in haste but soon afterwards regret their decision, each rejecting the other for different reasons. The engagement is consequently broken off without acrimony, by mutual consent, despite a somewhat awkward intervention by Helen's aunt, Juley. The eldest daughter, Margaret, then resumes her friendship with Paul's mother, Ruth Wilcox. Ruth's most prized personal possession is her family home at Howards End. She invites her friend to come and visit, feeling that Margaret would immediately connect with the values and history which the old house represents. Ruth's own husband and children do not greatly cherish Howards End, for all its rich cultural heritage; such abstractions, while being very dear to Margaret, are relatively insignificant to them, other than the property's real estate value on the housing market. However owing to a series of circumstances Margaret never gets a chance to visit Howards End while her friend Ruth is still alive. Equally she is unaware that, gravely ill, Ruth regards her as an ideal prospective owner of Howards End, trusting that her home would be safe and in very good hands with her, after she is gone. As Ruth's condition deteriorates quickly, and Margaret and her family are about to be evicted from their London home by a developer when the lease on their house expires, Ruth bequeaths Howards End to Margaret in a handwritten note. This last will and testament of Ruth's (about which Margaret herself knows nothing) is delivered to her husband from the nursing home where she died, causing great consternation and anxiety to the Wilcoxes. Mrs Wilcox's widowed husband, Henry, and his children, burn the note without telling Margaret anything about her inheritance. However over the course of the next several months, Henry Wilcox seeks Margaret's company and is very much impressed with her, as she is with him. Their friendship blossoms into romance and in due course, Henry asks for Margaret's hand in marriage. Margaret accepts. It soon becomes apparent that their personalities could not be more different from one another; the courageous, idealistic, compassionate, high-minded and romantically-inclined Margaret tries to get the fairly rigid, unsentimental, staunchly rational Henry to open up more, to little effect. Henry's children, while outwardly polite to Margaret, do not look upon her engagement to their father with a friendly eye. Evie, the daughter, soon to be married herself, is largely concerned with her own affairs, whereas Paul, the younger son, now lives and works overseas, making his way in Nigeria. The main opposition comes from the elder son, Charles, and his wife Dolly, who are only civil enough to conceal their hostility to Margaret, yet really see her as an intruder, posing a potential threat to their own ambitions. Most of all they fear any claim she could one day have on Howards End.
Gradually, as they get to know him better, Margaret and Helen become aware of Henry's prejudices, including his dismissive attitude towards the lower classes. Acting on Henry's advice, both sisters encourage Leonard Bast, a friend of theirs, to resign his respectable post as a clerk and seek employment elsewhere, having learned from Henry that the insurance company he works for stands outside a protective group of companies and, heading for failure, is very likely to be smashed. A few weeks later Henry reverses his opinion, having entirely forgotten about Bast; but it's too late. Leonard Bast had already resigned his modest yet safe position, thereby losing whatever precarious hold he once had on financial security; following which we learn that his subsequent desperate job-seeking efforts come to naught.
An additional complication is that the young Leonard Bast lives with a troubled, vulnerable "fallen" woman for whom he feels responsible. True to his word, he keeps his promise and marries her. Helen continues to try to help him, ostensibly out of guilt for having interfered with his life in the first place, as Bast had not wanted it and Henry Wilcox had explicitly stated beforehand that he advised no one, but also perhaps because she is secretly attracted to him. Soon enough however it all goes terribly wrong. Helen encounters the starving Basts and, appalled by the state they are in, brings them to Evie Wilcox's wedding garden party, whereupon Henry recognizes Bast's wife, Jacky, as his former mistress. He flees from the scene shaken to the core, outraged and horrified, breaking off his engagement to Margaret. Ever mindful of appearances and his own respectability, he immediately suspects some dark plot to entrap and expose him. Later the same day he calms down and tells Margaret that ten years previously, he had seduced Jacky and embarked on an adulterous affair with her in Cyprus. The young woman was barely sixteen years old at the time and had just lost her father. He had carelessly abandoned her as soon as it suited him to do so, leaving the expatriate English girl on foreign soil with no money and no way to return home. Margaret, dreadfully disturbed by this, confronts Henry about his ill-treatment of Jacky, which she regards as a moral transgression. Henry is embarrassed and ashamed but unrepentant. Such are the ways of the world, to his mind. He explains that he lived as he could. Margaret is still very much in love and, wishing to save the relationship, forgives him, bravely declaring: ... "it's not going to trouble us". Henry and Margaret realize they must put the past behind them in order to make peace with each other and plan their future together.
The Schlegel sisters drift apart, partly because of Margaret's impending marriage into the Wilcox family, partly because of Helen's profound disapproval of Henry's treatment of the Basts. Much distressed by what she has heard from Leonard Bast about the circumstances of Henry's acquaintance with Jacky in Cyprus, she is overwhelmed by love and pity for him; indeed she sees Leonard Bast as a strikingly altruistic and romantic figure whose struggle throughout life bears the mark of heroism. Helen and Leonard are thrown together in an atmosphere of great anguish and succumb to their feelings of mutual passion. Finding herself pregnant, Helen leaves England, travelling to Germany in order to hide her condition, but later returns to England upon receiving news of Aunt Juley's illness. She refuses to meet her sister face-to-face but is tricked by Margaret, who, following Henry's suggestion, had travelled to Howards End, where Helen's belongings are kept. Having correctly guessed that Helen would wish to retrieve them, she surprises her sister by appearing on the scene unannounced. Henry and Margaret had planned an intervention with a doctor, presuming Helen's evasive behaviour was a sign of emotional instability, even mental illness, possibly. However, as soon as they encounter Helen at Howards End, they see her true condition for themselves.
Margaret then determines it is her duty to stand loyally by her sister and help her at such a time. She tries in vain to convince Henry that if she can countenance and forgive his own transgression, he should by the same token forgive Helen hers. Henry, strongly indignant, remains unconvinced, immovably standing his ground. At this point Leonard Bast arrives at Howards End, still tormented by the affair and wishing to speak to Margaret. He is not aware of Helen's presence there, having lost contact with her ever since, fiercely proud no matter how desperate his circumstances, he had refused her offer to assist him financially. Charles Wilcox then bursts upon the scene and, in an effort to ingratiate himself with his father, attacks Bast for purportedly "insulting" Helen. He strikes Bast with the flat edge of a heavy old German sword which had belonged to Margaret's long deceased father. Bast then attempts to grab onto a nearby bookcase, which collapses in a heap on top of him; tragically his weak heart instantaneously fails and he dies on the spot. Margaret assumes responsibility for this turn of events and sides completely with Helen and the dead Bast, informing her husband of her intention to leave him.
Charles Wilcox, charged with manslaughter, is found guilty and sentenced to a prison term of three years. The scandal and ensuing repercussions have a profound effect on Henry, causing him to take a good look at his life and examine his conscience. Mostly he learns the value of empathy and begins to connect with others. Writing a new will, he now bequeaths Howards End to Margaret, as his deceased first wife Ruth had wished. He further stipulates that after Margaret's own death the property will go to her nephew, Helen's son by Bast. Helen is warmly reconciled with Margaret and Henry. Fully supported by them, she decides to bring up her son at Howards End. The scene of the tragedy is then revealed as a place of poetic justice and ultimate redemption. It may be said that Margaret is the heroine of the story because, in making a complex, thoughtful, remarkably noble moral choice to stand by her sister, while at the same time reversing her decision to leave her husband, she effectively resolves the conflict; indeed, by staying married to Henry, lovingly supporting him through his own greatest hour of need, she acts as a uniting force, bringing all the elements peacefully together. The future is ostensibly happily assured as the open-minded, forward-looking idealism of the Schlegels is finally balanced and integrated with the healthy drive and essential pragmatism of the Wilcoxes, each side learning tremendous lessons from the other through a vital process of discord brought into harmony. Bast, representative of the working class, is problematically written out. However, remember that his son with Helen is set to inherit Howards End from the Wilcox family.