The big thing to notice with regards to setting here is the HUGE difference between city life and country life. The novel moves between urban and rural (and increasingly suburban) settings, and explicitly forces us to look at the problem of urban sprawl. Forster carefully situates his characters and readers in two "homes" – first, the Schlegels' house in Wickham Place, London, and second, in the Wilcoxes' house in the country, Howards End.
London is a place of chaotic progress in Howards End, and the way Forster depicts it, it's no surprise that our characters can't wait to escape the city. Sure, it's a place of cultural enrichment and sophistication, but it's also characterized by impersonal business relations and equally cold economic realities. The city is a place where both poverty and wealth are inescapable – and the disparity between the two is painfully marked. London is what ruins Leonard Bast, and also what drives Margaret Schlegel to long for a greater sense of human connection so desperately.
In counterpoint to this rather depressing vision of city life, we have an idealized – perhaps over-idealized – vision of the countryside. According to Forster, the country is the repository for all things old-fashioned and good; there are remnants out there of Ye Merry Olde Pre-Industrialized England. The narrator tells us frankly that people victimized by the city, like Leonard, would have been better off if they had just stayed in the pastoral settings of their ancestors. Poverty seems not to have a place in rural or village life, and there seems to be a greater sense of, for lack of a better word, a kind of primordial Englishness there.
Ultimately, the Schlegels and Wilcoxes retreat to the country to try and rebuild their families – and implicitly, to try and maintain the connection between England's past and future. We're not sure how successful this venture will be, however; at the end of the novel, we see the ominous, rust-red glow of the city's lights impinging upon the rapidly suburbanizing countryside surrounding Howards End. Forster's novel leaves us uncertain as to what direction England is actually taking, and if there's any hope for the values of old England anymore.