The Complete Guide To: Iceland

Northern Lights, glacial landscapes, the midnight sun and thermal waters are just some of this island's natural delights. Cathy Packe takes the plunge

I want to see the bright lights tonight

So long as you prefer daylight to neon, Iceland is the ideal choice. At this time of year, Europe's second-largest island (after Britain) is green rather than icy and enjoys 22 hours of daylight: reasons enough for a summer visit. Located north of Scotland, west of Norway, east of Greenland and dangling beneath the Arctic Circle, Iceland has a landscape that combines volcanoes and hot springs, glaciers and fjords.

Highlights include Skaftafell National Park in the south-east, which is dominated by the country's largest glacier, Vatnajökull; the crumpled landscape where two tectonic plates meet; and the West Fjords with their dramatic cliffs and fishing villages.

But don't rule out Iceland as a winter destination, too. As long as you are dressed to cope with snow, ice and the biting winds that sweep across the island, there is something curiously attractive about this unusual volcanic landscape covered with freshly-fallen snow. Iceland is also a popular place from which to see the Northern Lights – or at least to try to. A memorable natural phenomenon, the aurora borealis is a variety of light formations caused by the combination of charged solar particles and solar winds that form a dramatic natural firework display. Unfortunately for visitors, the bright lights show is never guaranteed – cold temperatures and clear skies are vital yet unpredictable necessities – but most hotels in Reykjavik, and other towns around the island, offer evening excursions when the weather conditions are right.

Where do I start?

Most travellers who touch down at the island's main airport, Keflavik, head straight to the capital, Reykjavik. It is a quirky and colourful place – although by British standards it has more in common with a medium-sized town than a capital city. The colourful, clapboard houses of the old town contrast with more modern buildings such as the National Theatre and the University.

The city and much of the surrounding landscape are dominated by the tallest church in the country, Hallgrimskirkja, which sits atop the city's highest hill. The upward sweep of the building's exterior is intended as a reminder of the Icelandic mountains, its vast tower doubling up as a radio mast when the church was designed in the 1930s.

Opposite, the Einar Jónsson Museum houses a collection of monumental works by Iceland's first sculptor, as well as the apartment where he lived with his wife.

On top of another of Reykjavik's hills, Oskjuhlid, is the Perlan complex, whose centrepiece is a striking, glass-domed building containing the Saga Museum (00 354 511 1517; sagamuseum.is). This interactive display provides a handy introduction to Iceland's history, from the arrival of the early Viking settlers in the ninth century. The museum opens daily 10am-6pm, noon-5pm in winter. Admission is 1,500 Icelandic krona (ISK), which works out at £7.20.

I want to explore

Using Reykjavik as a base, there is plenty to see within easy reach of the capital. The most popular rural attractions are included on a circuit known as the Golden Circle. Highlights along the route include Pingvellir National Park, where the ancient parliament, or Alping, took place; the politicians were attended by as many of the population as were able to make the journey. All that marks the spot now is a flagpole, although the area remains the site where important national events are marked, including the first 1,000 years of Christianity in Iceland, which was celebrated in 2000. In autumn, when the foliage begins to change colour, this is one of the most beautiful parts of the island.

In addition to its historical importance, Pingvellir also has geological significance. It sits on top of the North Atlantic ridge – between the Eurasian and American tectonic plates – which are gradually pulling apart, making this an area which is highly active. Anyone walking around will be aware of a deep fissure underfoot, but may not realise its significance until a guide issues a dire warning against walking into any holes: "don't forget there is nothing between you and the centre of the earth".

Other stops on the Golden Circle circuit include the magnificent Gullfoss, the dramatic sequence of waterfalls reached from a steep pathway, and Geysir, where the hot springs have been active for up to 10,000 years, and from which the term "geyser" – for a spouting hot spring – derives.

This region is easy to explore by car; expect to pay around £70 a day to hire a vehicle, and about £0.85 a litre for petrol.

An alternative is to book a trip with Reykjavik Excursions (00 354 580 5400; re.is), which charges ISK9,800 (£47) for a day trip.

Further afield?

North of Reykjavik is Snæfellsnes, a 90km peninsula dominated by a range of beautiful mountains. At the end is a glacier, Snæfellsjokull. An inspiration to countless writers and artists, Snæfellsjokull is the setting for Jules Verne's science-fiction novel, Journey to the Centre of the Earth.

The largest town on the peninsula is Stykkishólmur; the Baldur ferry (00 354 433 2254; seatours.is, ISK3,850) operates from here to the island of Flatey, continuing to Brjanslaekur further north on the mainland.

On the north-east coast, Myvatn is an area of volcanic landscapes and geothermal springs, in the middle of which is Lake Myvatn – a shallow expanse of water containing 44 islands and a large population of ducks.

The village of Reykjahlid is a good base for exploring the lake, and a number of organised tours and hiking trails start from here.

Easily accessible from the lake is the Dettifoss waterfall, a vast torrent of water that is claimed to be the most powerful falls in Europe.

Not far from Myvatn is Akureyri, Iceland's second-largest city, although one that could hardly be described as a hectic metropolis. Its main attractions are the botanical gardens, containing an example of every native plant in Iceland, and the Akureyri Folk Museum (akmus.is) on Adalstraeti. In summer the museum opens daily 10am-5pm.

Ferries sail twice a week from Akureyri on a five-hour journey to the island of Grimsey, the only part of Iceland that is within the Arctic Circle.

Some wildlife?

Iceland is known for its birds, which include a population of around 10m puffins. Many of these inhabit the island of Akurey, north of Reykjavik harbour, from whereu o hour-long Puffin Express trips depart four times daily (00 354 892 0099; puffinexpress.is) between 1 May and 1 September. Each costs ISK3,000 (£14.40). Puffins are also the main attraction on the the Westman Islands, off Iceland's south coast. The Herjólfur ferry (00 354 481 2800; herjolfur.is) sails twice a day in each direction, connecting the islands with Porlakshofn on the mainland in just under three hours. Tickets cost ISK2,420 (£11.60).

Iceland is also a popular whale-watching destination. During the season, which lasts from April to October, several ports – among them Hùsavik on the north-east coast – offer whale-watching cruises. Hùsavik is an attractive small town on Skjalfanda Bay, whose colourful harbour is set against a backdrop of snow-capped mountain peaks. Among its typically Icelandic features are racks for drying fish, and turf-roofed houses.

One of the long-established operators is North Sailing (00 354 464 7272; northsailing.is), which offers three-hour trips for €48. Sightings are never guaranteed, but it is often possible to see minke, humpback and blue whales as well as dolphins, porpoises and a variety of sea birds.

I need to relax

Among Iceland's biggest attractions is its thermal waters, the best-known and most popular of which is the Blue Lagoon (00 354 420 8800; bluelagoon.com), a thermal pool between Reykjavik and the airport at Keflavik.

A couple of hours spent basking in the lagoon, sweating in the sauna and steam areas, or swimming in the naturally-heated indoor pool is a pleasant experience, and given its proximity to the international airport, it is one that many visitors can fit in, even on a transit stop.

The Blue Lagoon opens 8am-9pm daily (10am-8pm in winter), admission €20. But all over the country there are plenty of cheaper opportunities to enjoy the hot springs. Reykjavik has a large number of public pools, including Laugar on Sundlaugavegur (00 354 553 0000; laugar.com). Here, at any time of year, you can swim in the warm water, then adjourn to one of the hot pots around the sides of the open-air pool. These are tubs, heated to temperatures of up to 46C, where people come to wallow and chat with their friends. The entrance fee is a very modest ISK360 (£1.75), although expect to pay the same again to hire a towel.

Adventure all year round Iceland survival kit

Summer or winter, there are ways to get off the beaten track in Iceland, and experience a few thrills at the same time. Dogsledding combines wildlife with nature; tours of up to an hour on the Myrdalsjökull glacier on Iceland's south coast, organised by Dogsledding Iceland (00 354 487 7747; dog sledding.is) cost ISK14,900 (£71).

Ishestar Riding Tours (00 354 555 7000; ishestar.is), based in the small town of Hafnarfjördur, not far from Reykjavik, gives visitors the opportunity to explore the countryside on horseback. Tours can suit experienced riders and those who have never been on a horse before, and prices start from ISK4900 (£23.50).

Getting there

You can fly non-stop with direct flights to Reykjavik operated by Icelandair (0870 787 4020; icelandair.co.uk) from Heathrow, Glasgow and Manchester, and Iceland Express (0118 321 8384; icelandexpress.com) from Gatwick. The international airport is at Keflavik, 25 miles south-west of the capital. The efficient Flybus service (flybus.is) leaves from outside the main terminal building about 40 minutes after each flight arrival, and goes to the city centre. From there, a fleet of smaller buses waits to transfer passengers to their hotels. Tickets should be bought in advance, either online or at the kiosk in the airport; they cost ISK2,200 (£10.50) one way, ISK4,000 (£19.15) return.

Iceland could hardly be described as a low-cost destination, but booking a package can be very good value. Those on offer from Icelandair range from weekend breaks that cover flights, accommodation and airport transfers to longer, escorted tours. Another option is to stop in Iceland for a few days before moving on to one of Icelandair's destinations in the United States, Canada or even Greenland.

Other operators include Voyages Jules Verne (0845 166 7008; vjv.com) whose seven-night Highlights of Iceland tour is available from £895, including flights and bed and breakfast accommodation.

Getting around

Driving is easy and the roads are refreshingly free of heavy traffic. Iceland's road network is concentrated around the coast, but drivers should bear in mind that in the remoter areas, four-wheel drive vehicles are necessary and petrol stations are scarce.

Among the companies that organise self-drive packages, and escorted tours, is Iceland Travel (00 354 585 4300; icelandtravel.is). Self-drive holidays can be between five and fifteen days, and prices, which start from €631, include accommodation and car hire.

Staying there

Hotels, like much else in Iceland, can be pricey, although at this time of year, when the weather is pleasantly warm, there are plenty of alternative forms of holiday accommodation. In Reykjavik, the most stylish place to stay is the art deco Hotel Borg (pictured) at Posthusstraeti 11 (00 354 551 1440; hotelborg.is). Double rooms are available from €233, singles from €203; breakfast is an extra €15.

Beyond the capital, reasonable accommodation is provided by Iceland's two main hotel chains, Hotel Edda (00 354 444 4000; hoteledda.is) and Fosshotels (00 354 562 4000; fosshotel.is). Both have properties around the country, although not all of them open year-round.

Hostelling International Iceland (00 354 553 8110; hostel.is) has 33 hostels around the country; the Reykjavik property is particularly recommended. Individual, dormitory and family rooms are available, and prices start at ISK2,300 (£11); there are discounts for members of Hostelling International.

Rural accommodation is provided in more than 130 farms throughout the country through the Icelandic Farm Holidays Association (00 354 570 2700; farmholidays.is).