Andy,
I started writing to people when I was at your stage now (i.e. end of 2nd year). This has 2 advantages: 1) you have plenty of time to develop a relationship with a potential supervisor, which will help you to determine whether you could work with them for 3 or so years. 2) If the don't currently have funding, and you impress them, they will have far more time to try and arrange funding.