Current land pressures in the world cities of the global North are encouraging a move towards denser urban living and the development of smaller homes than has been the case for many decades. While this appears environmentally beneficial when compared with the alternative of suburban sprawl, it comes at a cost: the number of extremely small homes appears to be increasing particularly rapidly, with less communal and public space available to those living in compact homes which offer little room for socialising, storing possessions or working from home. Drawing specifically on the experience of England and Wales, with a focus on the overheated property market in London, this commentary sets out an international agenda for the study of small homes, noting the growing evidence of the negative impact of dense urban living on mental and physical health, home-working and familial and intimate relations, as well as its failure to solve the crisis of affordability. The article suggests that rather than being a reasoned response to the housing and environmental crises, the phenomenon of ‘shrinking homes’ indicates the growing role of finance in the development of cities, suggestive of the way that developers are extracting maximum value from restricted urban sites in an era of planning deregulation. In conclusion, the commentary argues that urban scholarship needs to compile more evidence of space inequality in cities, pushing for policies designed to enforce minimal space standards while reducing the ability of the wealthy to construct very large homes.