A pioneering mortgage scheme designed to help property owners from falling into negative equity has been extended by the National Asset Management Agency.

The scheme which was launched in May was initially restricted to the sale of 115 houses three counties but has now been extended to 180 homes in 12 counties.

Under the scheme purchasers only have to provide 80% of the purchases price with the remaining 20% deferred to cover any potential fall in value over five years.

The so-called "80:20 deferred payment initiative" allows buyers to obtain mortgages from three state-guaranteed banks - Bank of Ireland, Permanent TSB and the EBS part of AIB.

NAMA today said the houses range in size from two bedroom to five bedroom with prices starting from €100,000 with properties located in counties Carlow, Galway, Limerick, Clare, Kerry, Meath, Cork, Kildare, Sligo, Dublin, Kilkenny and Waterford.

''This initiative is still at an early stage, but it has been favourably received by the prospective purchasers,'' said NAMA's chief executive Brendan McDonagh.

''It is aimed at instilling confidence in people that they can buy a home without the immediate worry of falling values and facilitating greater price discovery,'' he added.

So far 41 houses that were part of the original pilot scheme in May have been sold and there are plans to roll out the scheme across hundreds of properties after the initial pilot phase.

The scheme comes weeks after Central Statistics Office figures suggest that the property market is bottoming out. Sherry Fitzgerald, the estate agents, also said their surveys show it is bottoming out in Dublin, but remains cautious about rural areas outside of Cork and Galway.