Reading the story carefully it seems that the photograph was taken before a digger totally removed the ruins of the house, which had been burnt down in the arson attack that preceded its total demolition and removal.
The islanders faced with his reappearance decided not to incriminate anyone and keep quiet.
The only question I have is how did it burn down? I imagine it was in quite a state of disrepair after almost a decade of low to no maintenance. Part of it may have been falling down already and the islanders may have assumed he'd simply abandoned his house and the island.