Yields on complex buy-to-let (BTL) properties rose towards the end of 2011 as a lack of mortgage availability forced more people to rent.

Figures from broker Mortgages for Business showed that yields on houses in multiple occupation (HMO) rose in the fourth quarter of 2011 to 9.9 per cent, from 9.3 per cent in the third quarter.

Multi-unit freehold block (MUFB) yields were also up on average to 7.1 per cent from 6.9 per cent, although basic or ‘vanilla’ BTL property yields actually declined from 6.3 per cent to 6.13 per cent.

David Whittaker, managing director at Mortgages for Business, commented, ‘Yields on buy-to-let are much stronger than in other asset classes, which is tempting an increasing number of investors into the market.’

Whittaker attributed the high yields to a ‘vast backlog of buyers’ who are confined to the rental sector due to the price of property compared to average incomes and restrictive lending conditions.

He explained, ‘This is keeping demand astronomically high and pushing up the cost of renting into uncharted heights.

‘With economic conditions congealing, property prices will remain low and demand for rented property should hold steady, meaning the healthy returns available from buy-to-let show no signs of abating.’

The index, which was launched at the start of 2011, has recently included semi-commercial property, such as a newsagent's with people living in flats above it.

The yield on semi-commercial properties in 2011 averaged 7.8 per cent, the second-highest BTL return behind HMOs, as complex deals continued to provide the best returns.