Marshy area in the south of England (3)
I believe the answer is:
fen
'marshy area' is the definition.
(both can mean wetland)
'in the south of england' is the wordplay.
'in' says the answer is hidden in the clue.
'FEN' is hidden in the letters of 'south of england'.
(Other definitions for fen that I've seen before include "Low marsh" , "Low-lying wet land with grassy vegetation" , "Marshy area of land" , "English marsh" , "Low marshy land" .)