In the 2024 Houzz UK State of the Industry, the platform for home renovation and design found industry professionals are more optimistic than last year.

Based on data of nearly 150 professionals in renovation and design, Houzz reported companies have higher expectations for business performance in 2024 than at the same time in 2023.

Nearly half of respondents anticipated 2024 will be a good or very good year (48% versus 40% in the same report a year ago).

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More than half of design and build firms expect 2024 will be a good or very good year (53%), followed by interior designers and architects (52% and 48%, respectively).

Home renovation professionals also 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.

More than 3 in 5 businesses anticipate heightened demand for their services (62%), which is more than 10 percentage points higher than last year (52%).

Houzz found 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).

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).

However, more than half of design and construction businesses expect gross revenues to increase in 2024 (53%), with one in five businesses expecting revenues to increase by 25% or more (22%).

They reported the adoption of new business strategies including bringing in larger-budget projects, adjusting pricing structures, and offering new products and services.

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.

Home improvement professionals also plan to offer new products and services and expand their geographic area (38% and 32%, respectively).

Staff economist at Houzz Marine Sargsyan commented on the findings: “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.

 “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.