Thames Water is urging customers to conserve supplies but has not called for an outright hosepipe ban.
The company has not joined Southern Water in outlawing the practice but on Monday released a statement raising fears of a drought in and around London.
Demand is at its highest “for 25 years,” Thames Water said, adding customers should “use water wisely”.
"At times the demand can outstrip our capacity to treat water and hence we have been promoting the need to use water wisely to ensure we can maintain supplies for all," the statement read.
"Our reservoirs have fallen below average for this time of year. This is due to the fact that nine out of the last 11 months have been drier than average with underground aquifers and flows in the rivers, which we rely on for water, also lower than expected for this time of year."
Thames Water said it has a drought plan to cope with falling reservoir levels but has not ruled out a hosepipe ban should the situation worsen.
Measures it has suggested to customers to save water include: swapping a hose for a watering can, not watering plants when the sun is out, taking shorter showers, and turning off the tap in between bursts when brushing teeth.
The statement added: “If we do not receive around or above average rainfall in the coming months this will increase pressure on our resources and may indeed result in the need for more water-saving measures including restrictions."
The UK has been experiencing some of its driest-ever conditions already this summer and the heat is expected to continue in London this week with forecasted temperatures above 30-degrees on all days up until Sunday - apart from Tuesday which peaks at 29 degrees.