Lay person mostly with bit of lust here (7)
I believe the answer is:
brothel
'here' is the definition.
Although both the answer and definition are singular nouns, I cannot see how they can define each other.
'lay person mostly with bit of lust' is the wordplay.
'lay person' becomes 'brother' (non-ordained member of a religious order).
'mostly' means to remove the last letter.
'with' is a charade indicator (letters next to each other).
'bit of' suggests taking the first letters.
The first letter of 'lust' is 'l'.
'brother' with its last letter removed is 'brothe'.
'brothe'+'l'='BROTHEL'
(Other definitions for brothel that I've seen before include "oldest professional establishment?" , "Stews" , "It's given here!" , "House of prostitution" , "House of ill repute" .)