I would check the area above the middle section. You may have water running in behind it and allowing water ingress. If so run some clear MS polymer along the join between the sandstone work and the pebble dash. (eg, clear CT1)
I have no idea what tools you have to hand.
If I were to gloss that area, I would use a scraper to remove the loose paint and then a random orbital sander to flatten any ridges. I would then apply dilute SBR to the bare sandstone and fill with 2 pack filler and sand that back. The SBR provides a base for the two back filler to stick to and reduces the likelihood of any moisture pushing the filler away from the surface.
If you are planning to use waterbased masonry paint, there is less need for the SBR. Fillers such as Toupret Quick Fill exterior will suffice. It is however quite soft and should not delaminate if the substrate becomes slightly damp.
Two pack filler (pretty much the same stuff as car filler) will provide the flattest finish, but require more arduous sanding. The likes of quick fill will be much easier to sand back but less impact resistant (think: someone resting a ladder against it).
If my customer wants a higher quality finish, I go with the two pack but, off the top of my head, material costs aside, the labour costs are 5(?) times higher just for filling and sanding. That said, that doesn't take in to account the labour to get the rest of the woodwork up to the same standard.
