 The castle was subsequently given by Henry II to Thomas Becket when he became chancellor in 1155 . Becket extended the castle to accommodate his large household , but fell from favour in 1164 and the castle was confiscated by the king . Henry II liked Berkhamsted and subsequently used it himself extensively . By the mid @-@ 12th century , the castle had been rebuilt in stone , probably by Becket , with a shell keep and an outer stone wall ; the bailey was divided in two by a wall to form an inner and an outer bailey . A gatehouse led down into the town , meeting with Castle Street . Henry II also officially recognised the surrounding settlement of Berkhamsted as a town in 1156 . 
