What is meant by the UK's housing shortage?

I'm really enjoying the BBC Radio 4 programme called More Or Less which was was highlighted to me by an ex-colleague. It has a lovely presenting style with some lovely gently deprecating, ever-so-british humour, on the edge of silly (slapstick even), often breaking the 4th wall. They are always asking for listener questions and this is what sent in about the UK's so-called housing crisis. (At least I think I sent it in; I might have forgotten).

I found this on the BBC website: The government says it wants a million homes built in England by 2020. The National Housing Federation estimated 974,000 homes were needed between 2011 and 2014 but figures from 326 councils showed only 457,490 were built. This suggests that we are 516,510 homes short. Assuming at the very least single occupancy, does this suggest there are over half a million people without houses? Where are all these people living currently? Or is there a certain requirement for a certain number of empty homes to exist in order to sustain the system?

2016-01-13