Imaam al-Kaasaani رحمة الله عليه, one of the giants of the Hanafi Madh-hab, mentions in Badaa'i`-us-Sanaa'i` fee Tarteeb-ish-Sharaa'i` that the place of the intention (Niyyah) is the heart; hence, even if no verbal intention is made, your Niyyah is valid. However, it is Mustahabb (recommended) to make the intention verbally along with making it in the heart.