Varmahlíð is a small village near Skagafjörður. It has around 140 people live on the eastern slope of the hill for which the town is named (varmur=warm, hlíð=slope).

Varmahlíð is on the ring road Route 1. Varmahlíð is in the middle of a flourishing agricultural area, where the Icelandic horse has been treasured for centuries. One of the main industries is horse-rearing.

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