England’s Geology Helps Reveal the Economic Value of Historic Buildings
Historic buildings are a familiar and much-loved part of England’s towns and cities. They shape local identity, attract visitors, and give places their character. But an important question has long been difficult to answer: Do historic buildings support local economies to grow - or are they simply more common in places that were already prosperous?
A new study, funded by the UK's Department for Culture, Media and Sport (DCMS) Culture and Heritage Capital programme and conducted by Historic England, tackles this question in a new way. By combining detailed data with insights from England’s geology, an economic model uncovers clear evidence that historic buildings play an active role in driving economic growth.
Foreword by Lord Mendoza CBE
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Read the foreword
Foreword to report on the effect of the historic built environment on local economic growth in England.
Separating cause from coincidence
This research examines whether:
- historic buildings drive economic success, or
- whether economically successful places have more historic buildings because they have long been centres of economic activity
To answer this properly, we need to distinguish cause from coincidence.
What lies beneath the surface
The study approaches this problem from an unexpected angle - geology. Before modern construction and transport, buildings were largely constructed using locally available materials. As a result, areas with strong, durable stone, are likely to contain more historic buildings that have withstood the test of time.
This relationship can be seen clearly in the maps below.
Historic buildings are highly concentrated in major urban centres such as London, Birmingham, and Manchester. By contrast, there are fewer historic buildings in rural areas.
The map on the left shows the different types of stone found across the geography of England. The map on the right shows how the presence of historic buildings relates to local stone – a clear pattern appears where places that have better access to good quality building stone like limestone and sandstone tend to have a higher number of historic buildings today.
Map 1 and 2: Geological composition and Geology and historic buildings combined
Historic buildings are drivers of local economic growth
The economic model developed for this study isolates a measurable relationship between heritage and local prosperity.
Heritage and local economic performance
Areas with higher densities of historic buildings perform better economically. Even small differences in the number of historic buildings across places are associated with noticeable economic gains.
The research shows that a neighbourhood with a 10% higher density of historic buildings experiences faster growth in Gross Value Added (GVA), equivalent to a 0.5 to 0.6% increase in economic output over the period 2010-2023.
To put these figures in context, national GVA provides a useful benchmark for scale. England’s total GVA is estimated at around £2.5 trillion per year, so even a small percentage change of 0.5–0.6% translates into an uplift of approximately £12.5–15 billion in economic output over the period 2010-2023.
Heritage and economic specialisation
The research points to specific ways in which historic buildings support local economic growth. Crucially, the benefits are not evenly distributed across all sectors; instead, growth reflects patterns of local specialisation shaped by historic character.
- Tourism and visitor appeal: Tourism and visitor-related industries show the strongest gains in heritage-rich areas. Historic buildings strengthen place identity, attract tourists and local visitors, and boost spending in accommodation, food, and cultural activities. This makes the visitor economy a primary channel through which heritage translates into local economic growth.
- Property markets and place attractiveness: Historic buildings contribute to distinctive urban environments that are valued by residents and investors. This is reflected in higher real estate market activity and increased imputed housing rents, indicating stronger local demand for living and working in heritage-dense places. The growth of property-related services highlights how heritage enhances local identity and long-term place attractiveness.
- Specialisation rather than “more of everything”: Areas rich in historic buildings tend to specialise in sectors aligned with their strengths, such as visitor economy activities, property-related services, and cultural and amenity-based consumption. Conversely, sectors that rely on large and flexible spaces, including transport and warehousing, exhibit lower activity. This pattern reflects heritage-led constraints as well as deliberate local economic focus.
Preserving the past to support future prosperity
This research fills a longstanding evidence gap in heritage policy. For years, it has been widely argued that heritage supports regeneration and growth, but robust causal evidence has been limited. This study demonstrates that the historic built environment is an important economic asset that shapes local economies.
By reframing heritage as a long-lived, productive capital stock, these findings show that protecting, managing, and investing in historic buildings can help support local regeneration, visitor economies, vibrant town and city centres, and long-run prosperity. The historic built environment not only tells the story of where we have come from but also plays a vital role in shaping the economic opportunities of local communities today.
Methodology
To reveal the true economic impact of heritage, the research addresses a central challenge: historic buildings are not randomly distributed. They tend to cluster in places that were historically important or prosperous. Therefore, simply comparing heritage-rich areas to heritage-poor ones risks confusing cause with consequence.
To overcome this problem, the study uses an innovative instrumental variable (IV) approach. It does this by exploiting a fascinating source of historical variation - the availability of durable building stone due to local geology.
Before modern transport and construction technologies, local stone availability shaped where long-lasting buildings could be built, and therefore where such buildings survive today. Because these geological features were set millions of years before modern economic patterns emerged, they provide a credible source of variation in the presence of historic buildings that is independent of modern economic forces, closely resembling a randomized experiment.
Using this approach, the study draws together:
- Data for over 30,000 neighbourhoods across England (LSOAs)
- ONS Gross Value Added estimates from 1998 to 2023
- Detailed spatial data on 380,000 listed buildings
- Bedrock geology from the British Geological Survey
This rich dataset allows researchers to isolate the causal economic impact of the historic built environment, going beyond correlation to uncover a meaningful and measurable effect on growth.
While the analysis draws on data relating to listed buildings, its primary objective is to capture the broader impact of historic buildings as a whole, rather than to isolate the effect of formal listing designation.
Footnotes
[1] Gross Value Added (GVA) is the measure of the value of goods and services produced in an area, industry or sector of an economy.
[2] Instrumental variable (IV) is a method used to estimate causal relationships when randomised controlled trials are not feasible. For further information, see the Magenta Book analytical methods annex and the Wikipedia page for IV.