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After Helen Schlegel's brief romance with Paul Wilcox ends badly, the cultured, idealistic Schlegel family thinks it they will have nothing further to do with the materialistic, commerce-obsessed Wilcoxes. The Schlegels continue with their intellectual lives. At a performance of Beethoven's Fifth Symphony, they meet an impoverished insurance clerk named Leonard Bast, who regards them with general suspicion when Helen accidentally steals his umbrella. The Schlegels are shocked when the Wilcoxes move from their country estate of Howards End to a London flat opposite their home on Wickham Place in London. But Paul has left to win his fortune in Nigeria, and Helen is vacationing with her cousin Frieda in Germany, so there is little danger of an unpleasant scene. Margaret, Helen's older sister and the head of the family, even befriends Mrs. Wilcox; they go Christmas shopping together, and Margaret throws a luncheon for the ethereal, selfless Mrs. Wilcox.
When Mrs. Wilcox dies not long afterward, she leaves a handwritten note behind asking that Howards End be given to Margaret. But her pragmatic husband, Henry, a prominent businessman, and her greedy son Charles, a struggling businessman, refuse to act on the matter and never mention it to Margaret. One night, Margaret and Helen run into Henry, and they discuss the case of Leonard Bast; Henry warns them that Leonard's insurance company is doomed to failure, and they advise him to find a new job. But poor Leonard, who associates the Schlegels with all things cultural and romantic--he reads constantly, hoping to better himself--resents this intrusion into his business life and accuses them of trying to profit from his knowledge of the insurance industry.
Margaret and Henry develop a halting, gradual friendship. When the lease expires at Wickham Place, the Schlegels begin looking for another house (their landlord wants to follow the general trend and replace their house with a more profitable apartment building). Henry offers to rent them a house he owns in London, and when he shows it to Margaret, he suddenly proposes to her. She is surprised by her happiness, and after considering the proposal, she accepts.
Shortly before Margaret and Henry are scheduled to be married, Henry's daughter Evie marries a man named Percy Cahill; the wedding is held at a Wilcox estate near Wales. After the party, which Margaret finds quite unpleasant, Helen arrives in a disheveled state, with the Basts in tow. She declares indignantly that Leonard has left his old company, found a new job, and been summarily fired; he is now without an income. Helen angrily blames Henry for his ill-considered advice. Margaret asks Henry to give Leonard a job, but when he sees Jacky Bast, he realizes that he had an affair with her 10 years ago, when she was a prostitute in Cyprus. Margaret forgives him for the indiscretion--it was before they even met--but she writes to Helen that there will be no job for Leonard.
Helen and the Basts have retired to a hotel in town, and after Jacky goes to sleep, Helen and Leonard stay up discussing Helen's philosophical observations about life. After Margaret's note arrives, a feeling of tragedy descends on their conversation, and they make love--an unwelcome development for both of them: Leonard is wracked with guilt, and Helen becomes pregnant. She leaves for Germany the following morning, and both she and Leonard recede from Margaret's life. Margaret and Henry are married, and plan to build a new home in Sussex.
After some time passes, however, Margaret begins to worry about her sister, and with Henry's help, she arranges a scheme to surprise her at Howards End, where Helen is going to collect some books. (The Schlegels' belongings are being stored at Howards End.) Here, Margaret sees Helen's advanced pregnancy, and is filled with love and tenderness for her sister. Helen asks to spend the night with Margaret at Howards End, but Henry refuses to let a "fallen woman" sleep in his home. When Margaret points out that Henry himself has committed a worse sexual indiscretion than Helen, Henry is outraged, and Margaret resolves to leave him, returning to Germany with Helen.
In the meantime, Leonard decides to confess to Margaret what happened, and he travels to Howards End the morning after Margaret and Helen sleep there. When he arrives, he is beaten by Charles Wilcox with the flat of a sword, and a bookcase falls on him. Leonard has a heart attack and dies. After the inquest, Charles is charged with manslaughter and sentenced to three years in prison. Henry is shattered, and comes to Margaret for help. Henry, Margaret, and Helen move into Howards End, where Helen and Henry learn to be friends and where Helen's son is born. Fourteen months later, they are still living there happily.
