The market for home loans made to Americans with patchy credit histories suffered another blow on Tuesday as Freddie Mac, the US government-chartered mortgage finance group, said it would no longer buy several risky types of subprime mortgages.

The move, billed as a way of protecting borrowers from predatory lending practices, follows a sharp sell-off in the subprime mortgage world that threatens to spill over into the broader $8,000bn US mortgage market.