Small old house in London area (4)
I believe the answer is:
soho
'london area' is the definition.
(I've seen this before)
'small old house' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'house' becomes 'ho' (abbreviation for house).
's'+'o'+'ho'='SOHO'
'in' acts as a link.
(Other definitions for soho that I've seen before include "London district known for its nightlife" , "Entertainment district in London's West End" , "Central London entertainment area" , "London's former Bohemia" , "Once notorious part of central London" .)