Peasant's home south of foreign town (7)
I believe the answer is:
villein
'peasant's' is the definition.
(medieval term for a peasant)
'home south of foreign town' is the wordplay.
'home' becomes 'in' ('he's home' can mean 'he's in').
'south of' is a charade indicator (letters next to each other).
'foreign town' becomes 'ville' ('town' in French).
'in' put after 'ville' is 'VILLEIN'.
(Other definitions for villein that I've seen before include "Subject" , "Feudal tenant" , "Feudal peasant" , "Person bound to feudal lord" , "Lowly worker" .)