While Britain has had below-average rainfall the past six months, London and much of southern England have had the driest 18 months in 74 years.
Overall, 2005 was Britain's driest year since 1973, the Times of London reported.
The government issued its first drought order Monday. It bans non-essential water use for 270,000 homes and businesses served by the Sutton and East Surrey water company.
Southern Water and Mid Kent Water, with 1.24 million customers, have applied for drought orders. Thames Water, which serves 8 million customers in and around London, was ordered to apply for a drought order.
Water ban violators face fines up to $9,400.
Drought orders ban filling swimming pools, watering public parks and sports facilities, and using hoses to water private land -- among other restrictions.
The orders will cost $565 million in lost business this year, Britain's Horticultural Trades Association estimated.