The average cost of a home in England and Wales jumped by £2,048 during the first week of 2006, figures showed today.
The increase in asking prices, which was the equivalent of 0.9 per cent, was the largest weekly rise since May 2004, according to property website Rightmove.
It said the market had been stoked up by first-time buyers seizing the opportunity to get on to the property ladder during the traditionally quiet Christmas period.
As a result, demand from the lower end of the market helped push up the average price of flats and terraced houses by one per cent or more than £1,500 during the five weeks leading up to January 7.
The group said the improving demand at this end of the market, combined with increased sales levels during the second half of 2005, had given sellers and estate agents the confidence to edge prices up on more popular properties.
But it added that it remained to be seen if this New Year optimism was justified.
Overall, during the five weeks to January 7, the asking price of all types of properties in England and Wales rose by around 0.1 per cent to average £196,319, as falls earlier in the period offset the rise seen during the first week of the year.
The group said prices rose by 3.6 per cent during 2005, and it is predicting similar growth of four per cent for 2006. During the five weeks, asking prices in both London and the South-east had risen by 1.3 per cent.
According to Rightmove, recoveries in the market tended to start in the South and then filter out into the rest of the country, adding that it expected this trend to continue during the year with these regions outperforming other areas of the country in 2006.
But other areas fared less well during the past few weeks, with prices falling by 4.1 per cent in the South-west, and 3.4 per cent in East Anglia and Yorkshire and Humberside.
Prices also slipped by 2.6 per cent in the East Midlands and 2.3 per cent in the West Midlands, while they were 1.9 per cent lower in the North-west.
Greater London and the South-east also reported the strongest growth during 2005, with prices rising by 6.2 per cent and 6.1 per cent respectively.
In the North, they ended the year 1.5 per cent lower than they started it, while in York-shire and Humberside they fell by 1.1 per cent.
Miles Shipside, commercial director of Rightmove, said: "The geographical split is quite marked this month, as sellers in many parts of the country continue to readjust.
"London and the South-east have had a couple of tough years of acclimatising themselves already and are now coming out the other side.
"Without their strong performance, the national figures would have been in negative territory, as you would expect at this time of year."
Meanwhile, property website Propertyfinder.co.uk also reported a surge in first-time buyers who were househunting, claiming they now made up 37 per cent of all people who were looking to buy a property.