The old houses, shops and warehouse buildings on Flatey reflect the optimism and development of the period around 1900. In former times the island was important both as a fishing centre and as the hub of the commercial life of Breiðafjörður. Traders from the Hanseatic League in Germany ran a trading post here. The first Icelandic trader received a temporary licence in 1589, and in 1777 Flatey received a charter as a town.
The monastery and Flateyjarbök
For a time in the 12th century there was an Augustinian monastery on Flatey. Later it was closed and the monks moved to Helgafell, near Stykkishólmur, but to this day a stone, Klaustursteinn, in the field by Klausturhólar, is thought to mark its site. Flateyjarbók, (the Book of Flatey), one of the most important and impressive of the ancient Icelandic saga manuscripts, was preserved on Flatey in the Middle Ages. A photocopy reproduction is on display in the library (the oldest one in Iceland, built in 1864 in the heyday of Flatey’s prosperity.)
The church on Flatey dates from 1926. The frescoes in the apse were painted by Kristjana and Baltasar Samper, and are based on the local landscape and traditional occupations. Flatey has been an inspiration to artists of many types and the subject of songs, poems and works of fiction by many writers, including Matthías Jochumsson, Sigurður Breiðfjörð, Herdís and Ólína Andrésdóttir, Þorvaldur Thoroddsen, Halldór Laxness, Þórbergur Þorbergsson, Sigvaldi Kaldalóns, Jökull Jakobsson, Nína Björk and Jón Gunnar Árnason.