House prices stayed static in the last two months and fears of more expensive mortgage money could be to blame.

Figures released today show nationwide values are up 4.1 per cent from April but still 5.9 per cent below the market peak of late 2007.

The office of the banking Ombudsman received twice the number of formal complaints in 2008/9 than it did a year ago.

New Zealanders are still optimistic about the state of the housing market, according to an ASB survey.

House prices continued their upward momentum last month.

Reserve Bank Governor Alan Bollard has issued a warning to banks about the perils of approving high-risk mortgages.

Only a small portion of the Government's allocated $18.4 million to help modest income-earners buy houses has been taken up.

The Reserve Bank has left official interest rates unchanged at 2.5 per cent this morning, while confirming they are not likely to rise till the second half of next year.

Interest rates have been left on hold by the Reserve Bank this morning, with governor Alan Bollard confirming again that he intends to keep them low till "the latter part of 2010".

Rising house prices and interest rates have combined to weaken home loan affordability to its worst level since December 2008.

Kiwibank is increasing its fixed mortgage rates for the second time this month.