More than a million homes are planned for south-east England
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The UK will run out of water unless government plans to build more than a million homes in south-east England are changed, the Environment Agency says.
Chief executive Barbara Young told BBC News regulations needed to be rewritten to make it compulsory for developers to build more water-efficient homes.
The voluntary approach was failing and "dramatic action" was needed, she said.
The agency wants all new houses to have to be fitted with water-saving taps, toilets, showers and washing machines.
She called for action from both the government and house builders.
Current building regulations were too lax and without change there could be dire consequences, Ms Young said.
"Government is hoping the building industry will respond to voluntary means - but we are drinking in the last chance saloon and quite frankly we are going to run out of water before these voluntary means can take effect if we're not careful.
"We are rapidly running out of road in terms of a voluntary approach and we need to see a very active campaign to get house building as sustainable as possible.
"We are going to run out of water shortly."
The Environment Agency has warned that a winter drought in the UK, which is at its most severe in Kent and Sussex, may lead to summer water restrictions and environmental problems.
In many areas ground water is already at its lowest ever level. To the south of London some reservoirs are less than half full.
Within south-east England, some companies are warning the watering of golf courses and football pitches could soon be banned.