Houzz, the leading platform for home renovation and design, has released the 2024 Houzz UK State of the Industry report, which reveals home professionals anticipate revenue increases this year following last year's dip.
The latest 2024 Houzz UK State of the Industry report* provides an outlook for 2024 and review of 2023 performance for residential renovation and design businesses based on data reported by nearly 150 professionals in the Houzz community.
Companies across industry sectors have higher expectations for business performance in 2024 than expectations at the same time last year, with nearly half anticipating that 2024 will be a good or very good year (48% versus 40% in the same report a year ago). Professionals forecast revenue growth along with improved demand for their services, despite rising costs of labour, products and materials. This follows the drop in gross revenue across the industry in 2023.
“Home industry professionals are somewhat more optimistic heading into 2024 than they were at this time last year. They are expecting to turn the tide following a challenging year, where economic conditions, such as inflation and rising costs of labour and materials, resulted in fewer and smaller-scope projects,” said Marine Sargsyan, Houzz staff economist. “With positive signs that inflation is easing somewhat and interest rates are stabilising, pros anticipate an increase in the demand for their services in 2024. Many pros adopted new processes and became more selective with the types of projects they’ll take on, making their businesses more resilient.”
Firms across the design and construction industry implemented a variety of strategies in response to the challenges they faced last year and now more than half of businesses expect gross revenues to increase in 2024 (53%), with one in 5 businesses expecting revenues to increase by 25% or more (22%). Strategies include bringing in larger-budget projects, adjusting pricing structures, and offering new products and services.
Design and build firms are the most bullish: More than half of design and build firms expect that 2024 will be a good or very good year (53%), followed by interior designers and architects (52% and 48%, respectively).
Demand for services expected to improve: More than 3 in 5 businesses across industry groups anticipate heightened demand for their services (62%), which is more than 10 percentage points higher than last year (52%). Interior designers are the most confident, with nearly three-quarters expecting increased demand (73%), compared with architects and design and build pros (59% and 57%, respectively).
Costs of doing business rise: Nearly 4 in 5 firms across all of the industry groups cited an increase in the cost of doing business in 2023 (79%), albeit slightly less than the previous year (82%). Product and material costs were the biggest drivers (70%), followed by business insurance costs and subcontractor costs (38% and 34%, respectively). Architects were impacted the most significantly, with 4 in 5 citing an increase in the costs of doing business in 2023 (83%), followed by interior designers and design and build firms (74%, each).
Product and material availability improves: More than 2 in 5 businesses expected the availability of products and materials to improve (41%), with interior designers most optimistic (55%), followed by architects and design and build firms (29%, each).
Professionals implement diverse business strategies: More than two-thirds of businesses plan to target larger budget projects (68%) and nearly as many plan to adjust pricing structures (65%) to achieve expected growth in 2024. Professionals also plan to offer new products and services and expand their geographic area (38% and 32%, respectively).
The complete 2024 Houzz UK State of the Industry report can be found HERE.
There are more than 3million home renovation and design professionals on Houzz, including architects, interior designers, home builders and design and build firms. Houzz Pro provides industry professionals with a business management and marketing SaaS solution that helps them run their projects efficiently and profitably while delivering an outstanding client experience, including estimates, CRM, project management and more.
* The Houzz UK State of the Industry was conducted among home renovation firms in the Houzz UK community that offer services related primarily to residential renovation and/or design. The study was fielded from December 2023 to January 2024. N=141.
