Particularly in London, houses are overvalued to the extent that rents are comparatively cheap vs. the rest of the country. Rental yields in London are significantly lower than they are in e.g. Manchester.
Yet you miss the key issue - which is mortgage availability.
I end up where I can afford to buy my own flat and rent it out to someone who is not myself at the rent I am paying and make a profit. But I would not be offered sufficient mortgage to simply own it myself despite the fact that the rent I pay is higher than the mortgage would be (and indeed even accounting for 2% rate rise I'd be fine).
Ntrails|10 years ago
I end up where I can afford to buy my own flat and rent it out to someone who is not myself at the rent I am paying and make a profit. But I would not be offered sufficient mortgage to simply own it myself despite the fact that the rent I pay is higher than the mortgage would be (and indeed even accounting for 2% rate rise I'd be fine).