The population of London and the South-East is set to grow 23% by 2035 putting a huge strain on water supplies during a drought.
Three water companies are ending the hosepipe bans that were brought in to combat the drought.
Gardening businesses have been given a temporary reprieve from the hosepipe ban after the wettest April on record.
Environment Agency chairman Lord Smith said:
"The extremes of weather that we saw last year highlight the urgent need to plan for a changing climate.
In 2012 we saw environmental damage caused by rivers with significantly reduced flows, hosepipe bans affecting millions and farmers and businesses left unable to take water from rivers.
But we also saw the wettest year on record in England, with around 8,000 homes flooded. Interestingly 2007 - which also saw some of the most severe flooding in recent memory - also started the year with hosepipe bans.
More of this extreme weather will exacerbate many of problems that we already deal with including flooding and water scarcity, so taking action today to prepare and adapt homes, businesses, agricultural practices and infrastructure is vital."
Richard Aylard of Thames Water says its hosepipe ban will be lifted from midnight tonight but has urged customers to use water carefully.
Thames Water, Anglian Water and Southern Water have announced that from Thursday, they are lifting the hosepipe bans that were brought in to combat drought in April. They say heavy rain over the last three months has improved water levels in reservoirs.
A "drought-friendly" garden, which aims to demonstrate how householders can keep their gardens beautiful - even through a hosepipe ban - is among the exhibits at this year's Chelsea Flower Show.
The 'Naturally Dry' garden uses native drought-resistant plants like ferns, and also shows how gardeners can make best use of any rainfall they do get.
Despite the recent wet weather, London and the south-east are still officially in drought.
Thames Water confirmed today there is no longer a possibility of more serious water restrictions being needed for its customers this year but expressed continuing caution about longer-term prospects.
Following exceptionally heavy rain in April and the first few days of May, the company said that although its ‘hosepipe ban’ would need to remain in place for the time being, it could now rule out applying for a Drought Order, which is required for a supplier to impose further restrictions.
Today’s announcement by Thames Water comes after the Environment Agency published a report removing drought status for 19 counties in England but confirming that London and the South East are still in drought, and that despite recent rain groundwater levels remain lower than 1976 in some areas.
Thames Water hassaid a couple of wet weeks is not enough to reverse record dry conditions seenin the region in the past two years.
Richard Aylard said most of the rain had gone into the soil, which acted like a "sponge", leaving the Thames region's groundwater and river levels well below normal.
"By the end of March it was so dry that most of the rain we have had since then has just made this sponge wet, rather than getting through to recharge the groundwater we rely on."
"As soon as the weather warms up, the plants will put on a growth spurt and suck up most of the moisture."
Mr Aylard also warned, "It is most unlikely that we will be able to lift the hosepipe ban until we have had some winter rainfall to really recharge the groundwater levels that are still, in places, lower than they were in 1976."
Thames Water is on a mission to encourage customers to save water during the current hosepipe ban.
The company's employees are handing out 'proud to be dirty' stickers for the back windows of cars - because they'll be washed less.