Older properties were never built with modern plasters or paints in mind. They weren't built with cavity walls or damp-proof courses...they didn't need them.
Just living in a house creates a lot of damp; baths and showers, cooking and gas fires, even breathing - all create water vapour. Water can also enter from outside - seeping through the structure when it rains - stone is porous. Modern plaster, when coupled with modern paint is hard and non-breathable and so seals in the damp. Eventually this will cause the plaster to lift and blow the paint off or go black and mouldy.
Lime plaster acts as a natural reservoir holding the damp until it can be released on a dry day. It is breathable; so it helps the wall to dry out when it has been rained on. In this way your home breathes naturally. My home is completely lime plastered and painted; has no damp proof course or cavity walls and is damp free.
All my lime plastering is done using a lime putty/sand and hair mix. It is three-coat work and will readily bond to a variety of surfaces providing they are properly prepared and suitable.
Backgrounds can be:
CLAY BOARD - this is very good for attaching to stud walls as it gives a finish to match existing lime plaster.
REED BOARD - this is made from traditional reeds bound together in sheets and is good for replacing original reed ceilings.
METAL RIBLATH - This is a modern version of traditional wooden laths but is much cheaper and large areas can be covered more quickly.
TRADITIONAL LATHS - These are either oak or chestnut and have been around for ever!
Equally as important is the final decoration - this should be a limewash or clay paint as gloss paint and some wallpapers or emulsions can act as a seal and cause damp problems.