The most common and most likely answer to this crossword clue is the 4 plus 8 letter word HOME COUNTIES
H
O
M
E
C
O
U
N
T
I
E
S
Buddy explains!
The straight part
We know that "area around capital" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case area around capital = home counties.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.