Houzz Inc. has unveiled its 2025 UK Houzz State of the Industry report, offering an in-depth forecast for the upcoming year and a review of the challenges and performance within the residential construction and design sectors in 2024.
The report, based on insights from professionals in the Houzz UK community, provides a comprehensive view of the trends, obstacles, and opportunities that will shape the industry in 2025.
Heading into 2025, there is a sense of cautious optimism. Despite the challenges faced in 2024, 40% of industry professionals anticipate a good or very good year ahead. Additionally, 57% of respondents expect revenue growth, reflecting a four percentage-point rise compared to the previous year. This shift toward optimism follows a difficult year in which many professionals saw declines in revenue and profitability.
Marine Sargsyan, Houzz economist, remarked, “After navigating a difficult two years, home professionals are approaching 2025 with a sense of cautious optimism.”
“Professionals report that they are implementing new processes for operational efficiency and client communication, and are making strategic investments in technology to address the challenges they faced last year.”
Key Insights from the 2025 UK Houzz State of the Industry Report:
Focusing on Efficiency and Growth: Marine Sargsyan explains that professionals are concentrating on improving operational efficiency and communication with clients. Many businesses are investing in technology to overcome the challenges experienced in the previous year, demonstrating a proactive stance in uncertain market conditions.
Strategic Investments in 2025: In response to ongoing challenges, 87% of industry professionals plan to prioritise investments in areas such as operational efficiency. Specifically, 42% will focus on streamlining processes to improve productivity. Enhancing client communication (35%) and optimising sales processes (37%) are also key priorities, with architects placing a strong emphasis on the latter (45%).
Technology Use on the Rise: Software continues to be vital for many professionals in the industry. A large percentage of architects (76%) and interior designers (69%) depend on drafting and rendering software, while also utilising tools for invoicing, marketing, CRM, and website management.
2025 UK State of the Industry: Further Insights:
Interior Designers Lead with Optimism: Nearly 44% of interior designers forecast a successful year, with 69% anticipating revenue growth and 44% expecting greater demand for their services.
Easing Hiring Challenges: The recruitment landscape has improved, with 25% of professionals planning to expand their teams in 2025. This marks a four percentage-point increase from the previous year. Challenges surrounding hiring and subcontractor shortages have also diminished significantly, with shortages falling from 9% and 13% in 2024 to 5% each in 2025.
Rising Costs: 53% of professionals predict costs will rise, with design and build firms, architects, and interior designers being the most impacted (64%, 49%, and 36%, respectively). However, improvements in material availability and price volatility have eased some concerns.
Revenue and Profitability Declines in 2024: Over 60% of firms reported a drop in profitability in 2024, with 47% seeing lower revenue compared to 2023. Architecture practices were the most impacted, with 72% reporting a decline in profitability.
For a more detailed exploration of the 2025 UK Houzz State of the Industry report, click here to read the full findings.
About Houzz Houzz is the leading online platform for home renovation and design, connecting millions of homeowners with trusted professionals. Houzz Pro, the company’s all-in-one project management and design software, helps construction and design professionals win more business, streamline operations, and collaborate with clients. With over 3 million professionals and 70 million homeowners using the platform globally, Houzz is the go-to resource for home improvement inspiration, advice, and service provider connections.