Government Considers Buying Out Grindavík Homeowners Skip to content

Government Considers Buying Out Grindavík Homeowners

By Yelena

Photo: Golli. Grindavík.

The Icelandic government is considering buying out Grindavík homeowners who want to relocate in light of the ongoing volcanic threat to the town. At a press conference this afternoon, government ministers announced long-term measures are in the works to relieve Grindavík residents of the financial burden of owning homes in which they cannot live. The measures are still being finalised but will be put forth in a legislative bill in early February.

Unknown if or when Grindavík residents can return home

Grindavík was evacuated on November 10, 2023 due to strong earthquakes and the threat of volcanic eruption. A short but powerful eruption occurred near the town in December, and a second one in January occurred just outside the town limits, destroying three houses at the town’s northern edge.

Magma continues to collect underground at Svartsengi, north of Grindavík, and volcanologists say that further eruptions can be expected in the area. Grindavík has sustained considerable damage to infrastructure and homes, and it is unclear when residents will be able to return home.

Government aims to resolve uncertainty

The government measures introduced today are intended to resolve the uncertainty Grindavík residents have been faced with since they were evacuated from their homes last year. The measures aim to enable Grindavík residents to establish secure homes and ensure secure livelihoods while the town remains unsafe to inhabit. The government has also extended its short-term support measures for the displaced Grindavík residents.

At the press conference, Prime Minister Katrín Jakobsdóttir made it clear that the government was still finalising exactly what form the assistance would take, but that it was considering both buying out Grindavík homeowners so they would have the funds to purchase housing elsewhere, as well as taking on the interest payments on their mortgages to relieve them of that financial burden.

The decision is a big one, Finance Minister Þórdís Kolbrún Reykfjörð Gylfadóttir underlined. She added that government measures would impact other economic goals such as curbing persistent inflation. She outlined that the government would also explore whether it was possible to delay such a big decision as buying out homeowners through other measures that would relieve financial pressure on Grindavík residents.


Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!