This paper examines the association between neighbourhood and levels and changes in common mental disorders. Using data from a large scale nationally representative survey of individuals and households (the British Household Panel Survey), it locates individuals in their local neighbourhoods. These are defined as the nearest 500-800 persons centered around each individual in the survey. These 'bespoke' neighbourhoods are characterised according to five dimensions--disadvantage, mobility, age, ethnicity and urbanness--derived from factor analysis of the census characteristics of the residents of neighbourhoods in 1991. These dimensions measure characteristics of place that have been argued to be associated with mental ill health. The paper estimates multilevel models of the level and 5-year changes of common mental disorders (measured by the twelve item version of the General Health Questionnaire). Three and two level models are estimated, all of which allow for individual and household characteristics that may act as confounders of any neighbourhood effect. The results show the extent of association between neighbourhood and both levels and changes in mental health is limited. Less than one percent of the variance across individuals is at the neighbourhood level. The neighbourhood characteristics are not generally statistically associated with levels or changes in mental ill health. There is some evidence of interaction between neighbourhood characteristics and gender and ethnicity, but while statistically significant these interactions are small in size compared to the main effects of individual and household characteristics. What appears to be important for levels of common mental disorders are the observed characteristics of individuals and their households, not of place.