Musharraf's spokesman in London said the news of the flat's sale is "false, fabricated and fictitious", Geo News reported.
When his attention was drawn to an advertisement for the flat on a property website, he said he had no idea how it had appeared on the site.
The clarification came as businessman Raja Khalid Pervaiz claimed he had bought Musharraf's flat for 3 million pounds.
Pervaiz said he struck the deal though a retired military officer but Musharraf's spokesman dismissed this, saying several people were claiming different things about Musharraf to get cheap publicity.
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"It's unfortunate that some disgruntled elements are spreading false and malicious news about Musharraf in this sensitive time."
The News daily, part of the Jang Group that also runs Geo News, had yesterday reported that Musharraf's flat was on sale. The website that originally advertised the sale continued to feature the same flat number and pictures yesterday.
Muhammad Ali Chohan, organiser for Musharraf's party in UK, said a former close aide to him had been contacting media outlets to pass on false news.
Musharraf, 70, had bought the house for 1.3 million pounds in 2009 when he settled in London after leaving Pakistan. He is currently facing trial in Pakistan for treason.
The four-bedroom flat on Castleacre, Hyde Park Crescent, near Edgware Road and Marble Arch, is located on the 9th floor and has a double room reception and two baths.