Hosepipe bans may have to be introduced because the winter has been unusually dry, gardeners have been warned.
Reservoirs are as much as 40% under expected capacity
The Environment Agency said in the past four months southern England had had just three quarters of normal rainfall.
With the peak gardening season about to begin, the Agency is urging restraint in watering lawns and flowerbeds.
It said a dry April would make restrictions in the South West, the Midlands and East Anglia more likely.
Some reservoirs are just 56% full, compared with a usual 95% for this time of year.
Meyrick Gough of Southern Water said it had been one of the driest winters on record.
"We do need about another four to six weeks of rain before our reservoirs really respond and come back up to full water level," he said.
"We're really asking our customers to be aware of the dry winter and to use water wisely and not to waste it. It's not a renewable resource."
Southern Water may have to ban hosepipes if dry weather continued, he added.
A spokesman for Thames Water said the region had only seen 49 per cent of its average rainfall, adding that this was "cause for concern".
He added: "We have had no restrictions in our region for 15 years, and want to continue that record. It is too early to speculate about restrictions, as much depends on weather conditions."
The Campaign to Protect Rural England has called for "across the board" efficiencies to tackle shortages, particularly in light of plans to build thousands of new homes in the south.
"There's a lot that can be done with regulations to try and improve water efficiency, especially with new developments," spokesman Edward Dawson told BBC News.
"We could introduce much lower flush toilets, lower flow showers and lower flow taps - they all help to try and reduce the consumption that we have from our customers."
A spokeswoman for the Environment Agency said that while rainfall had been relatively low all over England and Wales, the drop in reservoir levels had not been seen everywhere.
It was unlikely that restrictions would have to be imposed in northern parts of England or Wales, she added.
A spokesman for Scottish water said there was "no issue" in Scotland with water stocks "well above acceptable levels".