I think the time constraints are definitely an issue when it comes to the finished product. I've thought about this over the various series, and I decided that, in my eyes the best approach would be that they are penalised if they go over the time constraint (but I guess that extra time has to be to a reasonable extent e.g. a day.. like you couldn't go over by a week or something haha).
For budget I reckon they should penalised if they don't spend their budget wisely. For example in the previous ep, Monika spent a load on the ceiling and compromised with tiny mirrors, which were too small for the wall because she had changed the ceiling height, in a fecking hair salon.