To be specific, it's a rule of thumb in the US. I would not be at all surprised if UK real estate works differently. But yeah, in some markets you just won't find things that reach that return. Then you'd have to decide if it's worth buying those properties, or buying in a different market, or just doing something totally different with your money (stocks, bonds, startups, whatever).
It pretty much confirms my suspicions that it's too late to get into RE (here) unless you already have some. (we almost got a place where the numbers worked very well about 8 years ago, but various delays meant we missed out and got married instead...
