The most common and most likely answer to this crossword clue is the 7 letter word BRISTLE
I've seen this crossword clue in The Times
B
R
I
S
T
L
E
More clues leading to the result BRISTLE
- See red hair
- Loveless city wanting end to crime — it's hairy
- React angrily where university abandons Old English
- English city lacking old English fibre
- Port exporting old English hair
- Bishop has at heart moral fibre to show resistance
- See red hair?
- Show annoyance in SW city when duck has flown east
- Loveless English city ending in catastrophe, as something tough faced?
- Bowled stone in anger, to show annoyance
Buddy explains!

The straight part
We know that "it's hairy" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case it's hairy = bristle.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.
What does BRISTLE mean?
BRISTLE noun- A stiff or coarse hair.
- The hairs or other filaments that make up a brush, broom, or similar item.
- To rise or stand erect, like bristles.
- Abound, to have an abundance of something
- (with at) To be on one's guard or raise one's defenses; to react with fear, suspicion, or distance.
- To fix a bristle to.