Suspicion surrounding monarch’s houses (7)
I believe the answer is:
terrace
'houses' is the definition.
(I've seen this before)
'suspicion surrounding monarch's' is the wordplay.
'suspicion' becomes 'trace' (suspicion can mean a small trace).
'surrounding' indicates putting letters inside.
'monarch' becomes 'er' (abbreviation for Elizabeth Regina, British Queen).
'trace' enclosing 'er' is 'TERRACE'.
(Other definitions for terrace that I've seen before include "Balcony" , "Flat area (on slope)" , "Paved area by building" , "Sloping area in stadium" , "Row of uniform houses" .)