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I think it started off purely as a fashion thing, when bricks were considered ugly in the post-war concrete era - hence the appearance of pebbledash, etc.
Since then it's often used as a 'solution' to damp, because people think that damp is only ever caused by water getting in - a myth seized upon and perpetuated by damp proofing companies. If you have properly functional guttering, then a well-pointed brick wall will not get so damp from rain that the damp comes all the way through to the inside, and between rain events the wall will dry out fine on its own.
The trouble is, once you've slapped impermeable cement render all over bricks then there's no way that any damp is getting out - and any that's caught inside - perhaps by a crack in the render elsewhere, or an internal leak - will be prevented from escaping.
NB If you have a wall cavity, then external render is less of an issue, but I'm assuming that's not the case
Why is it so common to use render in the first place then? Genuinely interested. There certainly are internal issues which I'm seeking to address (cold / damp bathroom) but the render is clearly damaged, letting in water and getting worse.
Unfortunately as this is a shared freehold, that's probably not an option.