Wheel seems fine, had new chain and sprockets done few days ago and all seems good. Just took the bike to a garage and he reckons the caliper might need rebuilding as it's binding slightly. Thought there might of been an easier fix 
It does only take a slight touch of the rear pedal for the brake to kick in quite sharply which I'm not sure if that's normal?

It does only take a slight touch of the rear pedal for the brake to kick in quite sharply which I'm not sure if that's normal?