The £25 million project is being delivered by Keepmoat Homes and will transform a formerly derelict cattle market into a new neighbourhood called 'The Parade', featuring 159 properties along with landscaped areas and a children's playground.
The development is being created in partnership with Sedgemoor District Council.
Ben Cook, Regional Managing Director for Keepmoat Homes in the South West, said: "We are excited to have now started work at The Parade, where we will be building much needed new high quality homes.
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"Keepmoat offers something different to other traditional homebuilders as we build over 80% of our developments on brownfield sites and specialise in helping people get on the property ladder. In fact 72% of our homes are sold to first-time buyers. This is particularly important in the South West where affordability is a real issue.
"The development will bring benefits to the wider community as well, with Keepmoat employing local people and contractors wherever possible. For us it isn't just about building houses but about re-generating unused land to create beautiful spaces where people want to live and supporting and growing local communities."
Council Leader Duncan McGinty said: "It has taken a long time to get to this stage, with much hard work from many people and organisations. We are delighted that work has finally started on The Parade which will bring more much-needed homes to Bridgwater."
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