Falling housing prices could push the United Kingdom back into a recession, says New York University economist Nouriel Roubini.

London, like many major global cities, attracts real-estate investments from abroad, acting as a safe haven for many investors.

Nouriel Roubini

Yet overall, the U.K. housing market has been soft, thus threatening economic recovery

"The economic weakness has been associated now with the renewed weakness in the overall housing market," Roubini tells Property Week.

"If the economy were to double dip, that would not be good news for the overall real-estate market, where prices have started to soften again nationally after rising after the onset of the financial crisis," he said.

"Nationally, that's an important thing to keep in mind."

Housing prices in Britain made an unexpected gain in February, climbing by a seasonally adjusted 0.3 percent from January, according to U.K. housing finance company Nationwide, Reuters reports.

Experts say uncertainty still persists.

"The overall picture is one of a market treading water," says Robert Gardner, Nationwide's chief economist.

"Given that the recovery hit a soft patch at the turn of the year and looks set to remain sluggish in the year ahead, the property market is likely to follow suit."

Fewer houses for sale could help bolster prices as well.

"Sellers remain reluctant to accept lower prices to secure a sale," Gardner says.

"There are tentative signs that the volume of homes coming onto the market is slowing."

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