What are the benefits of Lime?
Environmentally-friendly: when the cement was invented in 1824, it was first used in civil engineering projects. Unlike lime, cement is inflexible and lacks porosity so can be a direct cause of damp when used in old buildings. In the early 1900s, it began to be used in the construction of homes, although it was only after World War II that its use became commonplace and, by the 1950s, traditional lime products were little used. Today, they are undergoing a revival due to the rediscovery of traditional building techniques, their ‘green’ credentials and attractive appearance.
Walls can breathe:
an understanding of lime is essential if you plan to work on a traditionally built building whether you are repointing, rendering, plastering or rebuilding walls. If you use the wrong materials, such as cement-rich mortars or renders or modern impermeable paints, you are likely to be storing up future problems. The need for old buildings to breathe, so damp and other problems are avoided, cannot be over-emphasised and by using lime you will allow this to happen.

Most modern plasterers these days will use hardwall or bounding which will cause damp. We use bounding only on plaster board for dubbing out. Useing lime will help to prevent cracking small bit of dust in it to give a bit of bite. 45 years on the trowel

I don't disagree with the answer totally, l,m a bit confused by the cement comment though, and the 1824 date. I may be wrong but I think the Roman's used it .Lime is definitely more flexible and breathable for external walls.New buildings as well as old need to breath

Lime plasters and mortar with lime is essential on older buildings, usually pre 1990's due to the movement that occurs in these buildings, it's more permeable than modern materials which allows the right amount of breathing to eradicate damp issues that occur on most older, listed buildings. Research and knowledge is a must when working on old homes as not all houses demand the same techniques.