Just across the street from Grace Neill’s Bar in Donaghadee stands another of County Down’s most intriguing haunted sites—the Old Town Hall, also known as the Merchant House. Built around 1770 as a private townhouse for a wealthy merchant, the building has seen a varied history. Over the centuries, it has served as a family residence, a boarding house, and later as council offices.

Vacant and derelict for decades after the 1970s, the building was sympathetically restored in 2021. Today, it houses five private apartments—yet the stories from its past still linger.

The narrow laneway beside the building is officially known as Town Hall Lane, but older locals sometimes refer to it by a more ominous name: “Murder Lane.” This nickname dates back to a report in the Down Recorder on 22 May 1852, which detailed the suspicious death of a Mrs McCready in the lane.

The house itself has long been associated with strange activity. One resident commented:

“Whenever I’ve passed the old Town Hall, I get the hairs on my arms raising—and I’ve seen shadows inside…”

In 2016, the paranormal team Ghost Searchers Ireland carried out a series of investigations at the property. During an EVP (Electronic Voice Phenomenon) session, they claimed to capture the voice of a child who identified himself as “Matthew.”

Team member Caren Watters described a particularly active encounter in the basement:

“We were in a room just off the main one when we heard a loud bang. We found pieces of wood leaning against the wall—Gary recreated the sound by letting them fall against each other. I stepped back toward the doorway, and then saw something move from left to right in the room next to me. There was no one else down there. I instinctively moved closer to Gary, and just as I was explaining what I saw, a stone was thrown from the direction of the room. Then another hit Gary on the leg. The activity was astonishing.”

Further sessions led the team to believe that Matthew may have been a disabled child—possibly hidden from public view during a time when such individuals were often institutionalised or secluded due to social stigma. The team also reported capturing a thermal image of a small figure using an infrared camera.

Another EVP session recorded the voice of a male spirit calling himself “The Key Keeper.” Investigators interpreted this as a figure who may have watched over—or confined—the child in the cellar. A temperature sensor registered a sudden drop, prompting one investigator to ask the spirit to step back. When it did, the temperature rose again.

In 2017, a public investigation was held at the property. Tickets quickly sold out, with proceeds going to charity. Guests had the chance to try divination tools and professional paranormal equipment. During the event, another EVP reportedly captured the name “Thomas,” a balloon burst after being challenged by a lead investigator, and a torch was seen to repeatedly dim and brighten on command. A table-tipping session also produced visible movement, witnessed by several attendees.