A hamlet started developing on Lake Laugarvatn in the twenties, when the first of many schools was built there. The abundant thermal activity also triggered further growth with the construction of holiday houses in its proximity. A house was built on top of one of the hot springs down by the lake and a steam bath was the result.
A forest, constantly expanding, brooks and streams decorate the landscape. Some very popular tourist attractions and historic sites are nearby, The Golden Waterfalls, the Geysir Area and the ancient bishopric Skalholt. The boarding schools are used as summer hotels. Laugarvatn is a popular goal both summer and winter.