Ok here's an update on my situation.
Rang TMobile UK, the guy was a moron and made no sense, but here goes. He said, they can send me a refurbished iPhone 5 which will take 30 days and I can keep this phone until then (not good enough). Or I can send back this phone now, cancel contract then sign up again ad get a brand new phone in 30 days, so 30 days without a phone (not good enough).
Rang Apple, was told to do hard reset and then full restore (i was on the phone so couldn't do either), she said that they haven't heard of this issue before and assumes apple will have no official word, because they haven't heard of the issue, apparently everyone elses iphone 5 is fine and it's just mine (sounds like ********). She said to ring TMobile UK and they should replace. She also said if full restore doesn't work, it has to be hardware, no offence to the girl but I don't think she's high up the corporate ladder or anything more than a phone monkey. But so far the only official word I've heard from Apple is, if a full restore doesn't sort it, must be hardware. Slightly worrying.
I've done a hard reset which didn't fix it. Doing full restore from iTunes now. Will let you know.