Additionally, the share of pros anticipating revenue growth has risen four percentage points year-on-year (57%).

This follows a year marked by revenue and profitability declines reported across industry groups, in contrast with the growth expectations reported in the 2024 UK Houzz State of the Industry.

“After navigating a difficult two years, home professionals are approaching 2025 with a sense of cautious optimism,” said Marine Sargsyan, Houzz staff economist.

“Pros report that they’re implementing new processes for operational efficiency and client communication, and making strategic investments in technology to address the challenges they faced last year.”

Nearly nine in 10 firms across the industry (87%) plan to prioritise investments in key areas to address ongoing challenges and enhance operational performance. Increasing efficiency is a top focus, with 42% dedicating resources to streamline processes and improve productivity.

Similarly, improving the sales process is a significant priority (37%), as well as communication with clients and teams (35%), which is particularly important to architects (45%).

Finally, a quarter of interior designers (25%) and architects (24%) are focused on maximising returns on existing technology investments.

Most businesses in the residential construction and design industry already leverage software to manage operations, engage clients, automate workflows, facilitate payments, and enhance brand visibility.

For example, drafting and rendering software is used by 76% of architects, 69% of interior designers and 36% of design and build firms. Beyond these specialised tools, businesses also depend on software for billing and invoicing, marketing, CRM, employee time tracking and website building.

2025 UK State of the Industry: Major Findings

• Interior designers are most bullish: Nearly half (44%) of interior designers report a good or very good outlook for 2025, with over two-thirds expecting revenue growth (69%) and almost half anticipating increased demand for their services (44%).
• Hiring challenges seemingly ease: A quarter of professionals plan to expand their teams in 2025, marking a 4 percentage points year-on-year increase (25%). The percentage of those citing hiring difficulties and subcontractor shortages as major challenges in 2024 has dropped significantly compared to the previous year (5% for both, compared to 9% and 13%, respectively).
• Costs expected to rise: More companies expect costs to rise in 2025 than decrease (53% versus 8%). This sentiment is particularly strong among design and build firms, followed by architects and interior designes (64%, 49% and 36%, respectively).
• Perceived improvements to price volatility and availability: Although rising material costs remain a challenge cited by firms, the perception of price volatility and availability has seen significant improvements over the last year. The percentage of professionals citing these as top challenges has decreased considerably (11% and 3%, compared to 19% and 9%, respectively).
• Decline in revenue and profitability in 2024: A larger share of firms reported annual revenue and profitability decreases in 2024 than in 2023. More than 3 in 5 firms reported reduced profitability (62%, compared to 51%). Similarly, almost half reported lower revenue (47%, compared to 43%). This 2024 decline in profit is most widespread among architecture practices (72%), followed by interior designers and design and build firms (62% and 57%, respectively).