New research carried out by Reading University shows butts provide an ideal habitat for the insects throughout spring and summer.
The research suggests more of the insects breeding in urban areas increase the chances of a potential outbreak of malaria or West Nile Virus.
Report author Dr Amanda Callaghan said: "There is increasing pressure on water resources around the world, and people are responding to this by storing water on their property.
"Water storage containers make an ideal habitat for some species of mosquito and this is going to bring them into ever-closer contact with dense human populations.
Writing in their paper, Dr Callaghan and colleague Susannah Townroe added: "Within the UK, [water butts] are becoming increasingly common in residential gardens.
"A severe drought and subsequent hosepipe ban in the spring of 2012 across southern and eastern England led to reports of hugely inflated sales of water butt containers.
"Water butts collect rain from roof guttering along with vegetation, animal detritus... providing both a habitat and food resource for mosquito larvae.
"The one that was most abundant is called Culex pipiens, and in other countries C. pipiens carry diseases such as West Nile Virus."
Dr Callaghan said: "The main finding is that these mosquitoes are right next to people's houses and the Anopheles mosquito we found is a human-biting species and it can transmit malaria.
"Therefore, if someone comes back from their holiday with malaria and they get bitten, it could be transmitted to another person - and that is how you get outbreaks.
However she added: "The chances of there being a malaria epidemic in this country at present are relatively low because there has not been secondary malaria here since the 1950s."