Hi all,
In my experience they do not automatically associate the lost passport ref number with the new application.
After calling multiple times and getting nowhere i used the webchat service, supplied my passport cancellation ref and my application moved from ‘identity details received’ to ‘processing’ in the same day (after being sat in the previous stage for 2 weeks). My application has now been allocated to the Peterborough office.
So if your application has been stuck on a stage for a while, use the webchat service and give them the reference number :).
Best wishes.