Landmark new research reported on by Historic England uses England’s underlying geology to demonstrate – for the first time – that historic buildings actively drive local economic growth, not merely reflect it.
Historic England writes:
The research, ‘Effect of the Historic Built Environment on Local Economic Growth in England’, resolves a long-standing question in heritage policy: do historic buildings genuinely drive local economic growth, or were they simply built in places that were already prosperous? The answer, according to the most rigorous causal analysis of its kind yet conducted in England, is that historic buildings actively cause economic growth – and England’s geology helps prove it.
From limestone to local wealth
The research tackles a central question of cause and effect. Historic buildings are not spread evenly across England: they tend to cluster in places that were already centres of trade, administration or wealth. Comparing richer and poorer areas therefore risks mistaking those pre-existing advantages for the beneficial effect of heritage.
To strip this out, the study uses ‘instrumental variables analysis’, drawing on something entirely unrelated to modern economic conditions: the rock beneath the ground. Before modern transport and construction materials, building depended largely on what was most readily available and least costly. Areas with access to durable stone, such as limestone or sandstone, built using materials that lasted, while elsewhere timber and brick were more common. As a result, geology influenced how many historic buildings remain today, without determining modern economic success.
Using this geological variation as an independent test, the researchers isolated the contribution of historic buildings to economic growth from the many other factors that shape local prosperity. The instrument proved powerful: areas with access to quality building stone have higher densities of listed buildings and are more economically successful over the study period – a pattern that cannot be explained by earlier economic advantage alone.
What the findings show
The results hold up consistently – across both snapshot analysis and data tracked over time. The causal estimates show that areas with double the number of historic buildings have 4% higher local economic output. Scaled up, a 10% increase in historic buildings is linked to an indicative uplift of around £12.5–£15 billion in GVA for the English economy. The authors stress this is an illustrative magnitude rather than a precise estimate – but the implications are powerful.
The research also shows that the economic effects of heritage are concentrated in specific sectors. The strongest effects are in tourism and visitor-related activity, alongside real estate and property values, consistent with historic environments making places more distinctive, more attractive and ultimately, more economically successful.
‘Heritage is not a cost we carry from the past – it is capital that is still working for us today. Our historic buildings represent generations of investment, and this research proves that this stored wealth remains active, continuing to generate significant growth right now. From high streets and market towns to the neighbourhoods people choose to live and invest in, historic buildings make places more distinctive, more attractive and more productive. They are not just part of our past – they are part of how communities grow and thrive’ [siad]Ian Morrison, Director of Policy and Evidence, Historic England
The study analyses Gross Value Added (GVA) data for more than 30,000 neighbourhoods across England, spanning the late 1990s to 2023. It draws on listing data from the National Heritage List for England and bedrock geology data from the British Geological Survey.
The ‘Effect of the Historic Built Environment on Local Economic Growth in England’ report contributes to the Culture and Heritage Capital (CHC) programme, led by the Department for Culture, Media, and Sport (DCMS), which is working to broaden economic analysis across the creative, culture and heritage sectors. Measuring the economic contribution of these sectors is standard practice, but the programme also wants to assess their impact on welfare, sustainable growth and long-term living standards. By highlighting the wider benefits these sectors bring to individuals and society, decision-making can be better informed.
The full report Effect of the Historic Built Environment on Local Economic Growth in England: An Instrumental Variable Approach is available at the following link:
https://historicengland.org.uk/research/results/reports/19-2026
