Is purchase of freehold fair value?

I’d really appreciate some help on whether or not I should buy the freehold of my flat which has recently become available.

The property is a converted house consisting of an upstairs flat which I own and a downstairs flat which the freeholder currently owns.

The lease has 74 years to run, the ground rent is £75 pa increasing to £125 pa in c20 years then no further increases.

The freeholder is now selling his downstairs flat for £150k & is offering me first refusal on the freehold at £12k which is what the Estate Agent(!)valued it at.

I’ve run some lease extension calculations which I think came out at £8k.

If I do not buy the the freehold at £12k what are the risks to me. I know my property will devalue as the length of the lease shortens, but could I not force him to extend or to sell me the lease at a lesser price? He will surely struggle to sell his flat without extending? Surely the lease is of little value to anyone but me?

What could be the consequence of the new owner also buying the freehold or an unscrupulous freeholder?

A lot of questions I know but this has just been offered this evening – any guidance is greatly appreciated.

Thanks

Paul