This old character resides in terraced house (3)

I believe the answer is:

edh

'this old character' is the definition.
(edh was a letter in Old English)

'resides in terraced house' is the wordplay.
'resides in' indicates the answer is hidden within the clue.
'EDH' can be found hidden inside 'terraced house'.

(Another definition for edh that I've seen is " old letter?".)

I've seen this clue in The Times.

Want a hint initially instead of a full solution? Install my app