Corrections are welcome, but Mike Flanagan's effective, nasty chiller might just be the best haunted-mirror film since, well, the "Haunted Mirror" episode of Dead of Night 70 years ago. The competition through intervening decades may not have been fierce, but enough new ground is broken here for us to feel confident in declaring Flanagan Horror a hot stock.

Oculus oscillates effectively from the present to an origin story set 10 years ago. At the start of the century, the Russell family move into a nice house in an attractive suburb. Their only mistake is to buy an item of furniture that turns out to have brought untold misery to previous generations of owners. You know the sorts of things. Long-faced Edwardian ladies flung themselves into millraces. Others went barmier still.

Before too long, Mr Russell, having placed the mirror in his study, begins to notice stuff moving about the house and hear mysterious noises in the passageways. As the parallel story clarifies early on, calamity eventually befalls the family. Son Tim (Brenton Thwaites) ends up in a mental asylum, and Kaylie (Karen Gillan), his sister, develops an obsession with the ancient looking-glass.

Kaylie doesn’t fit comfortably into the “final girl” mythologies of horror. Running with the notion that ghosts can be foiled with a biff to the head, she sets up various booby traps and devises strategies to make sure neither she nor her brother fall asleep. While Tim cowers, she savours any paranormal occurrences as proof of her growing suspicions.

Oculus thrives on clever sleights of hand that play with our grasp on reality. Flanagan delivers just enough "Lewton's buses" – as horror boffins, remembering that producer's Cat People, describe false shocks – to prepare us for a crazily busy denouement.

The director is assisted in his work by excellent Karen Gillan. Having served her time as a companion in Doctor Who, Gillan looks to have the stuff to thrive in Hollywood.