You're right to query this, it may well not be. But these days aren't typical. :-)
A 25 year repayment at 4% would cost about 6.4% of the original size of the loan, not of the value of the house. OK, so the balance is redressed slightly if you take account of loss of credit interest on the deposit.
But arguably a repayment mortgage is not a fair comparison because that way you are building up capital which when renting you are not. So it makes more sense to compare with an interest-only loan.
Also 1% for I&M is an unrealistically high estimate IMO (especially when houses are overvalued).
So I'd put the cost of ownership at nearer 4.5%.
Well, it does depend where you are, and of course if houses are overvalued you'd expect yields to be depressed if you measure them against the inflated values. So much so that 5% or less would not be unusual. So it's pretty close just now.
I gather a long term average yield in "normal times" should be in the 7-10% range. It needs to be comfortably above borrowing rates, otherwise all landlords would want to sell up.