Speculation is mounting that other European cities including London could follow the example of Berlin in effectively banning short-lets through online services such as Airbnb.
TheLocal - an English language German news service - reports that a Berlin court has now rejected a legal challenge to a new law banning private holiday rentals.
The law came into effect on May 1 and stopped owners and sub-letting tenants from letting out complete apartments or houses.
"This is a dark day for Berlin. We are unsettled by this decision and can't understand it in any way. We will continue to fight for private holiday lets," a spokesperson for Wimdu, another home-sharing website, is reported to have commented.
TheLocal says Berlin authorities feared that the phenomenon of private holiday lets were fuelling rising property prices; those challenging the law claimed that controls of this kind ran counter to property ownership rights enshrined in Germany's constitution.
The cases are among dozens filed since the law came into force, according to a spokesman for the administrative court.
Offenders can face fines of up to 100,000 euros and neighbours are encouraged to report any suspected misuse online.
In recent years many letting agencies have spoken out against what would appear to be a proliferating short-let market in parts of London - sometimes through Airbnb and similar sites, but also in some cases managed by agencies that have started specialist divisions to handle short lets.
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