01
City Water System
Greater London had 9.12 million residents in mid-2025, across 32 boroughs and the City of London, and is served by four water companies. Thames Water supplies most of the capital and is its sewerage undertaker. Affinity Water, SES Water and Essex & Suffolk Water supply parts of outer London. Because Thames Water’s area runs from Gloucestershire to Essex, its company-wide figures describe a much wider system. Ofwat, the Environment Agency and the Drinking Water Inspectorate regulate the sector. A January 2026 government white paper proposes abolishing Ofwat and creating a single water regulator; this remains a pre-legislative policy commitment.
02
Resources & Supply
London’s water supply combines the Thames and Lee reservoir systems with chalk groundwater, linked through the Thames Water Ring Main. The four water company areas serving London were classified as seriously water stressed in 2021 for metering purposes; that classification is not a measure of supply risk. Drought intensified pressure in 2026. Following a spring with only 40% of average rainfall across its region, Thames Water imposed a Temporary Use Ban from 23 July. The Environment Agency recorded the Thames area’s driest April–September on record. London reservoir storage was below its seasonal average in September, while higher July demand added pressure to the system.
03
Wastewater & Stormwater
London’s main response to sewage discharges into the tidal Thames is the 25 km Thames Tideway Tunnel, built and owned by Tideway. It intercepts and stores combined sewer overflow discharges, connecting major infrastructure investment directly to river quality. Reported storm overflow volume to the tidal Thames fell by about 86% to just under 3 million m³ in 2025, against a pre-Tideway average above 21 million m³. Those results rely substantially on modelled volumes and came in an unusually dry year. Operating responsibility was scheduled to transfer to Thames Water in 2026, while Tideway retains asset ownership.
04
Investment & Resilience
Ofwat’s final determination allows Thames Water £20.5 billion for 2025–2030, an allowance the company says does not appropriately support the investment required. Financing remains a delivery constraint: a non-binding recapitalisation proposal from London & Valley Water was still under review on 16 March 2026. For supply, the regional plan published in June 2025 includes two schemes not yet consented: White Horse Reservoir in Oxfordshire, with up to 271 Ml/d available by 2040, and Teddington Direct River Abstraction, with up to 67 Ml/d by 2033. These are planned deliverable yields, dependent on consent and delivery, rather than resources already available to London.
05
Key Challenges
- Rebuilding drought resilience after the Thames area’s driest April–September on record and the July 2026 Temporary Use Ban.
- Securing consent for White Horse Reservoir and Teddington abstraction in time to meet planned supply needs.
- Reducing leakage after Thames Water missed its 2025/26 target for a 21.3% three-year average reduction.
- Sustaining tidal Thames overflow improvements beyond an unusually dry first reporting year.
- Financing a £20.5 billion regulatory programme while the March 2026 recapitalisation proposal remained non-binding.