THE accounting scandal at Freddie Mac, the US mortgage finance giant, could influence Gordon Brown’s plans to reshape the UK housing market, analysts said yesterday.

The Chancellor is hoping to make the British housing market more suitable for euro entry by introducing US-style mortgages to the UK. However, the problems at Freddie Mac, which holds the mortgages of one in six American homes, will prompt Mr Brown to tread carefully.

In his euro statement to Parliament on Monday, Mr Brown said he was looking at ways of introducing more 25to 30-year fixed-rate mortgages, which are prevalent in the US and the eurozone.

Lenders and mortgage brokers said yesterday that Mr Brown would have to provide an incentive for UK borrowers to switch to long-term fixed-rate deals. British homebuyers prefer short-term fixes and variable rates because the upfront costs are lower.

Take-up of the few long-term deals on the market has been poor. Cheshire Building Society offers a 25-year fix at 5.14 per cent, but the deal carries complicated penalties and is regarded as expensive compared with a two-year deal pegged at 3.75 per cent.

The Council of Mortgage Lenders said it would be difficult for the Chancellor to orchestrate a move to longer-term fixed-rate loans in the UK unless he established bodies similar to Freddie Mac or provided a tax incentive.

Most analysts say that using the tax system to persuade borrowers to switch to fixed rates is unworkable because of the cost to the Exchequer, meaning that the Chancellor will be forced to rely on a Freddie Mac model to deliver more attractive fixed-rate products.

Freddie Mac and Fannie Mae, two private companies established by US Congress 30 years ago to encourage home ownership, are able to provide cheap mortgage finance because of their guarantee from the US Government and their dominance in the market.

Retail mortgage lenders in the US sell on their portfolios to Freddie Mac and Fannie Mae, who bundle these loans together and issue mortgage-backed securities. These securities, viewed as the next best thing to long-dated Treasury debt, are bought by insurance companies and pension funds.

Sabina Kalyan, a housing economist at Capital Economics, said that Freddie Mac provided a useful example for the UK. “The most obvious solution would be for the Government to promote the secondary mortgage market, allowing mortgage lenders to sell on their loan portfolio to financial intermediaries.”

However, Mr Brown would need to ensure that a UK secondary mortgage market was more transparent than that of the US, which has been badly shaken by the Freddie Mac scandal, analysts said.

Peter Dixon, of Commerzbank, said: “The problems that Freddie Mac has been having are to do with the accounting regulations, not the institution itself.”