HTC One (M8) — Htc M8 touchscreen problem

I have had my M8 for 14 months and very pleased with it. But in the past couple of months my touchscreen seems to have major problems. When using either the proprietary keyboard or Swype/Swiftkey etc, when I type, after half a dozen words the keyboard begins to display random word nonsense. The trace seems to focus on the '5' on the keypad, and swipes from the 5 to random letters despite whatever I am trying to type.
If I turn the phone onto landscape mode it seems ok for a short while before doing the same. It does this in messaging, documents, anything that uses the keypad.
There does seem a patch of the screen in the centre that doesn't react well to gestures etc.
I've tried a cache clear, and a full factory reset. It seemed OK for an hour or so but then started again.
I am running Marshmallow 6.12.61.4, HTC Sense 7.0
The phone isn't rooted.
Question is, could this be a software issue or something more serious like a hardware fault? I've tried a couple of screen diagnostic tests but they don't show any areas not working. Help!