Buy-to-let investors could face a rise in legal actions against them following the outcome of two important cases according to city lawyers.

DLA Piper in Birmingham has already experienced an influx of developers seeking to sue investors who are attempting to default on off-plan deals struck before the decline in the property market.

They predict a rise in enquiries following a ruling at Bristol’s High Court in December which forced a buy-to-let investor to pay damages of more than £130,000 to house builder Prestige Homes South West, after pulling out of an off-plan deal.

Last month, also saw the first ‘test case’ of its kind in Northern Ireland where a Belfast court ruled in favour of property developer, Barry Gilligan, against buyers involved in a row over new apartments.

Pam Shepherd who heads DLA Piper’s real estate litigation team in Birmingham, said: “Developers are taking a strong line against buy-to-let investors who bought off-plan and are now trying to withdraw from the purchase.

“My team has dealt with scores of these cases in the last year or so.

“Cases like these have been watched closely in the industry and could open the floodgates for Midland developers seeking ‘specific performance’ orders which compel the defaulting party to complete the agreed purchase.

“In lieu of specific performance, courts can terminate buy-to-let contracts and award the developer damages.

“However, developers need to bear in mind that difficulties in quantifying the level of damages applicable can make this a complicated and lengthy process.”

The Birmingham-based team say the next six months could see many more cases emerge in the Midlands as residential schemes, started during the property boom, reach completion.

Ms Shepherd added: “Whilst the property market is stabilising some properties are still valued at considerably less than when contracts to buy them were signed at the peak of the market in 2007. It’s likely we will continue to see developers being forced to take action against investors attempting to default on such agreements.”