The Little Stranger, By Sarah Waters

The spectre of modernity haunts this 1940s drama

The hardback cover of Sarah Waters' fifth novel, The Little Stranger, has been made to look like a second-hand 1940s pulp novel. With its bashed-up corners and a silhouetted picture of a woman running melodramatically up a staircase, it promises a tale of female hysteria from an era when banisters were still made of finely turned wood, and dresses cinched tight at the waist.

Of course, Waters doesn't write pulp. She has already proved her prowess at the historical novel, with the wonderful Victorian-era Fingersmith and then The Night Watch, set during the Second World War.

The Little Stranger moves forward to 1947, to a grand house in Warwickshire. The shadow of the war hangs over it, modernity lies ahead like a threat and, within it, an old country family is about to tear itself apart. The scene is set when Dr Faraday, the town doctor, is called out to visit a sick serving girl. He remembers his first visit to Hundreds Hall, when he was a boy, the house was full of Edwardian flourish and his mother was one of the army of serving staff. Now the colonel, the head of the house, is dead, leaving his widow, Mrs Ayres, her unwed daughter Caroline, and her son, Roderick, who was disfigured as a fighter pilot in the war, desperately trying to hold the inevitable collapse of Hundreds Hall – both in structure and finances – at bay.

It takes a while for The Little Stranger to gear up, as layer upon dusty layer of details of social class, decay and post-war blues are built up in the first 100 pages. There is not even a promise of ankle, let alone the sexual acrobatics that we have to come to expect from Waters' novels. But by now her readers must be confident of her mastery of storytelling, and know not to put it down.

The first major rupture occurs when a suave London family, who have bought a neighbouring grand house, arrive for a drinks party. They mock the maid's Edwardian starched cap and her playing jazz on the harpsichord. Caroline's ancient, docile dog suddenly turns and savages the guests' seven-year-old daughter, an attack on the hostile intrusion of modernity.

From here on in, The Little Stranger follows the steepening descent of the Ayres family into paranoia, hysteria and the possibility of haunting, particularly by the ghost of Mrs Ayres's first daughter, Susan, who died as a child and whom, it is suggested, spooked the dog into the attack.

While at one turn, the novel looks to be a ghost story, the next it is a psychological drama of the calibre of du Maurier's Rebecca. But it is also a brilliantly observed story, verging on comedy, about Britain on the cusp of the modern age. At one point, Dr Faraday, concerned that a psychological infection is sweeping through the Ayres family, visits his colleague Dr Seeley for his advice. "This is a weirder thing even than hysteria. It's as if – well, as if something's slowly sucking the life out of the whole family," says Faraday. "'Something is,' [Seeley] said, with another bark of laughter. 'It's called a Labour government.'"

The writing is subtle and poised and brings to mind 1940s movies in its cool pacing and visual details. There's even a little acknowledgment of this when Caroline is in Dr Faraday's car, being driven home after a ball. She insists on lighting two cigarettes at once and passing him one. "It'll be just like in the pictures," says Caroline, referring to the classic final scene of Now, Voyager.

While it may not have the shock value of Fingersmith or Tipping the Velvet, Waters has yet again written a classic thriller, styled as a classic thriller. It can be only a matter of time before a latter-day Hitchcock turns it into a film.