Despite difficult market conditions in 2025, a higher number of residential design and construction businesses saw their revenue increase compared to this time last year, according to new research from software platform Houzz.
According to the results of the platform’s 2026 UK Houzz State of the Industry report, which was released this morning, the number of design and build companies reporting revenue increases rose (38% in 2025 compared to 34% in 2024), and those reporting revenue decreases declined slightly compared with 2024 (45% versus 47% last year).
This year’s survey also found that profitability had improved, with fewer companies reporting declines (47% versus 62% in 2024) and the amount who saw profit increases also rising slightly (27% versus 26% in 2024).
However, in less positive news, only 32% of design and build firms polled said their outlook for 2026 was “good” or “very good”, while nearly half (47%) reportedly expect the year to be “poor” or “very poor”.
And despite a healthy number seeing revenue increases, nearly three-quarters of design and build firms (73%) also said their 2025 gross revenues fell short of expectations.
Looking at staffing numbers, Houzz’s report found that workforce growth in this sector has unfortunately “slowed considerably”, as the number of companies reporting staff increases fell from 15% to 9%, year-on-year. Additionally, around three quarters of companies polled (72%) said there had been no change in their staffing levels, which was a significant increase from the previous year’s figure of 60%.
Concerningly, less than 1% of interior designers or design and build businesses reported increasing their employee headcount during 2025.
“The outlook for 2026 is far from uniform across the industry following a challenging year,” said Marine Sargsyan, head of economic research at Houzz. “While optimism among architects and interior designers is more widespread compared with last year, design and build firms remain more cautious. In response to ongoing cost pressures and demand uncertainty, many pros are prioritising efficiency and strengthening their sales processes as top business strategies for the year ahead.”
In related news, kbbreview’s own recent 2026 retailer survey found a total of 31% of KBB retailers said they’d seen positive trading conditions throughout 2025, but just over a quarter (26%) said it was worse or much worse.
