Let me start by saying I'm a huge fan of this series of books. My six year old loved the first two books, and was delighted when the latest arrived (funnily enough at the same time as the third in the also great Ottoline series by Chris Riddell).
On the plus side, it's well written, beautifully presented and nicely illustrated, just as the first two books are. Where it drops points in comparison from the first two books is that it is just too dark for little readers. It deals with bullying and nightmares in quite a bit of detail, along with some fairly unpleasant incidents from one of the character's childhood. Now don't get me wrong, my middle child had already been read Matilda (the Dahl book with some hideous parents and teachers, but done in a very funny way), a couple of Harry Potters, and the Hobbit, so is far from sheltered, but did find parts of this quite frightening.
Reading it aloud, I could see why this was, and the overall tone is pretty dark. It';s still a good read, but I wouldn't plan on revisiting this book in the next couple of years, and it just seems to be aimed at a different type of reader than the first two books (which I would recommend without hesitation).
I hope this helps.