As the UK design and construction sector prepares for 2026, the new  2026 Houzz UK State of the Industry report from Houzz UK reveals a striking split in confidence levels among professionals. Architects and interior designers are entering the new year with renewed optimism, while design and build firms remain cautious amid ongoing cost pressures and uncertainty in demand.

According to the 2026 Houzz State of the Industry report, more than half of architects (55%) and interior designers (54%) rate their outlook for 2026 as good or very good, up from 33% and 45% in 2025. In contrast, only 32% of design and build firms share that sentiment, with nearly half predicting a difficult year.

Marine Sargsyan, head of economic research at Houzz, explains: “After a challenging 2025, the picture for 2026 is mixed. Architects and interior designers are increasingly confident, but design and build firms continue to tread carefully. Rising costs and unpredictable demand mean that efficiency and improved sales processes are now top priorities.”

Signs of recovery despite a tough year

The 2025 financial year was challenging for many, yet the report identifies tentative signs of improvement. Revenue growth was reported by 38% of firms, up from 34% the previous year, while those experiencing declines fell slightly to 45%. Profitability also showed early recovery, with fewer firms reporting losses (47% vs 62% in 2024) and a slight increase in those seeing gains (27% vs 26%).

Priorities for 2026 – efficiency, communication and sales

Across the sector, firms are focusing on operational improvements to navigate the market. Streamlining processes is a leading priority, with 65% of design and build firms, 57% of interior designers, and 56% of architects investing in efficiency.

Other priorities differ by sector:

• Design and build firms are also targeting cost and risk reduction (53%).
• Architects and interior designers are concentrating on better client and team communication (50% and 35%).
• Improving the sales process ranks among the top three priorities across all groups.

Cost pressures and workforce challenges

The report also highlights ongoing pressures:

• Rising costs hit nearly all sectors, with 90% of design and build firms, 86% of architects, and 68% of interior designers reporting higher operating expenses in 2025.
• Material and product costs remain the biggest factor (52%), followed by marketing and advertising (40%) and software (30%).
• Client acquisition continues to challenge firms, cited by 55% of design and build companies, 50% of interior designers, and 48% of architects.
• Staffing growth has slowed, with just 9% of firms adding employees, down from 15% in 2024. Meanwhile, 72% reported no change in headcount.

Houzz Pro: Supporting Professionals Across the UK

Behind the scenes, Houzz Pro provides the tools helping firms stay efficient and competitive. The platform offers project management, CRM, cost estimation, 3D visualisation, client collaboration, and more, giving architects, interior designers, and design and build professionals the resources to manage projects effectively. With a community of over 3 million UK and global construction and design professionals, Houzz Pro remains a central hub for innovation and collaboration in residential design.