Patterns of residential mobility suggest that urban areas in the UK are considered unpopular places to live, in particular by families with young children. The unpopularity of urban areas has been attributed to characteristics of the built environment as well as to levels of deprivation. This paper examines the relationship between levels of neighbourhood satisfaction and the density of housing in the local area using a sample of mothers with young children living in urban areas in England. Separate analyses were conducted for mothers resident in private sector housing and in social housing. The main finding is that for both groups there is a negative relationship between neighbourhood satisfaction and housing density. The relationship between housing density and the reported level of neighbourhood satisfaction was largely independent of individual and household characteristics. The adjustment for different aspects of neighbourhood deprivation significantly attenuated the gradient in neighbourhood satisfaction. For respondents in social housing, the economic dimension of neighbourhood deprivation accounted for the association between housing density and neighbourhood satisfaction. However, for respondents in private sector housing, housing density remained a significant predictor of neighbourhood satisfaction. These results show that families with young children would prefer to live in neighbourhoods with lower housing densities. However, to the extent that the factors producing neighbourhood deprivation are modifiable it may be possible to increase the number of households in urban areas without making them less attractive places for families to live. Copyright © 2010 John Wiley & Sons, Ltd.