This seems pretty sensible advice to me. I've seen it go both ways for contracts at the moment, some are really struggling and others are doing really well.
As ever, with contracting you're always taking on some risk when you come to the end of a contract. Much of your ability to get a contract will depend on your network (as well as skills and experience).
A lot of it depends on whether OP is looking to do full time contracting and leave their current job or just fill the 20% of their time they have now. But either way, the best idea is to go and look for the work and see what's around.
The picture seems to be mixed, not just in the contract market. That might mean those out of contract are swarming around what's available, but you only need to land one contract to get started.
Personally, I don't know anyone who's not moved to a new contract for the same client over the financial year boundary, but that's obviously just anecdotal and most of the contractors I know are in the same sector.
As ever, with contracting you're always taking on some risk when you come to the end of a contract. Much of your ability to get a contract will depend on your network (as well as skills and experience).
A lot of it depends on whether OP is looking to do full time contracting and leave their current job or just fill the 20% of their time they have now. But either way, the best idea is to go and look for the work and see what's around.