I would seriously look at permanent jobs as well as contract jobs. Totally stupid to give up work without somewhere to go to work.
Lots of contractors are going permanent right now. Huge number (1000's) let go Q4 last year and still looking. Some say up to 100,000 likely to come on market shortly (public sector IR35). LBG and others are outsourcing IT to IBM so likely to have lots of contractors and permies released.
Major agent (Hydrogen) said to me just last week that her contract seekers are 'panicking', with those never in need of agents to find work now out for contract for 3 months +.
If you are midlands or north, its going to be very hard for you.
I knew a chap who did what you did, wife and kids in tow. 6 weeks later he asked his old employer for his old job back. He got it and stayed there.
Contracting is getting lots harder.