Lives at the Saracen's Head with a relative (3)
I believe the answer is:
sis
'relative' is the definition.
(short for sister)
'lives at the saracen's head' is the wordplay.
'lives' becomes 'is' ('be' can be a synonym of 'live').
'at' is a charade indicator (letters next to each other) (I've seen this in other clues).
'head' says to take the initial letters.
The first letter of 'saracens' is 's'.
'is' after 's' is 'SIS'.
'with a' is the link.
(Other definitions for sis that I've seen before include "Girl" , "Family member (informal)" , "Sibling (informal)" , "spies ..." , "Relative's" .)