OP,
You have penetrating damp.
Moisture could be by-passing the window sealing &/or coming through the render & crossing a bridged cavity.
Is the main roof gutter free from any blockages?
The flat roof gutter has moss build-up in it.
Ask neighbours if there's any history of damp cavity insulation in any of those houses?
Any damp signs on the ground floor below ceiling or plaster?
You could hack off all the plaster on that wall & the window reveals, and make good with a 3:1 render mix of sand & NH lime - dont use gypsum - & Limelite skim finish.
This will give you, say, 20yrs free from damp signs on the decorated surface of the wall.
FWIW: what you show has been there for some time - how come the mortgage surveyor didn't pick it up?