Campaigners in Spain hailed a resounding legal victory over the country’s banks and government when Europe’s highest court struck down a draconian foreclosure law that had come to symbolise the brutal fallout from the eurozone’s debt crisis.

The decision by the European Court of Justice will give Spanish courts new powers to delay or freeze the eviction of home buyers who have fallen behind on their mortgage payments. It will add to rising public pressure on the government in Madrid to change a tough mortgage regime which has allowed banks to evict tens of thousands of struggling homeowners.

Soaring unemployment and the collapse of Spain’s debt-fuelled housing bubble have inflicted a heavy price on home buyers, who are frequently saddled with debt and exposed to the threat of eviction.